TCR_Public/081216.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

           Tuesday, December 16, 2008, Vol. 12, No. 299

                             Headlines


155 EAST: Moody's Downgrades Corporate Family Rating to 'Ca'
ADVANTA CORP: Moody's Downgrades Senior Unsecured Ratings to 'B1'
AGRIPROCESSORS INC: Buyer Offers to Pay Off Secured Creditors
AMERICAN INT'L: Sells $39.3BB RMBS Portfolio to Maiden Lane
ARCHWAY COOKIES: U.S. Trustee, Creditors Balk at Bonus Program

BEAZER HOMES: Fitch Affirms 'B-' Issuer Default Rating
BERNARD L. MADOFF: Irving Picard Appointed as SIPA Liquidator
BIOXEL PHARMA: Seeks Protection Under CCAA; Gets $450,000 Facility
BLYTH INC: S&P Cuts Corp. Credit & Sr. Unsec. Debt Ratings to B+
BOLL WEEVIL: Files for Chapter 7 Liquidation, Shuts Down 6 Stores

CADENCE INNOVATION: Withdraws Motion to Auction 3 Plants
CENTEX CORP: Fitch Downgrades Issuer Default Rating to 'BB'
CHARTER COMMUNICATIONS: Moody's Downgrades PDR Ratings to 'Ca'
CHARTER COMMUNICATIONS: S&P Junks Corporate Credit Rating
CHESAPEAKE ENERGY: S&P Affirms Corporate Credit Rating at 'BB'

CHRYSLER LLC: Default Risk Hinges on Government Action, S&P Says
CIRCUIT CITY: Seeks to Extend Lease Decision Period Until March 10
CIRCUIT CITY: Presents Panasonic Settlement Agreement
CIRCUIT CITY: Committee Demands Information on 1st Day Orders
CIRCUIT CITY: Seeks to Employ Mcguirewoods as Ch. 11 Co-Counsel

CLAYTON WILLIAMS: S&P Keeps B Sr. Unsec. Rating; Outlook Stable
CNL FUNDING: Moody's Downgrades Ratings on Seven Classes of Notes
COLEMAN CABLE: Moody's Affirms Corporate Family Rating at 'B1'
COMFORT CO: Files Joint Chapter 11 Plan and Disclosure Statement
CORPORACION DURANGO: U.S. Court Cedes to Mexico Main Proceeding

CULP INC: Receives Notice of Listing Non-Compliance from Nasdaq
CYBERSURF CORP: Didn't File Annual Report, Gets Cease Trade Order
DELTA FINANCIAL: Delaware Court Confirms Second Amended Plan
DP FOODS: Files for Ch. 11 to Halt Burger King from Dropping Deals
DR HORTON: Fitch Downgrades Issuer Default Rating to 'BB'

EASTMAN KODAK: Moody's Reviews Low-B Ratings for Likely Downgrade
ECLIPSE AVIATION: Committee Objects to Sale to Insider
FEDERAL-MOGUL: Indian Government Okays $15MM Investment
FIRST DATA: Posts $547MM Net Loss in Nine Months ended Sept. 30
FOREST OIL: S&P Keeps B+ Sr. Unsec. Rating; Outlook Stable

GENERAL GROWTH: Bankruptcy Will Have Little Effect on CMBS Deals
GENERAL MOTORS: Default Risk Hinges on Government Action, S&P Says
GENERAL MOTORS: Lets GMAC Defer $1.5B Payment Until Dec. 30
GMAC LLC: Extends Notes Offerings to December 26
GMAC LLC: Gets Dec. 30 Extension of $1.5-Bil. Owed to GM

GMAC LLC: Tries to Lure Potential Investors to Raise Capital
GRAHAM ENTERTAINMENT: Voluntary Chapter 11 Case Summary
GRANT FOREST: S&P Junks Corporate Credit Rating; Outlook Negative
GREENBRIER COMPANIES: Moody's Affirms 'B1' Corporate Family Rating
GREENSTONE RESOURCES: Creditors Accept Plan of Arrangement

HANCOCK FABRICS: Posts $70.6 Million Net Sales for 3rd Qtr. 2008
HAWAIIAN TELCOM: Wants Chapter 11 Case Moved to Hawaii
HEALTHSOUTH CORP: 3 Executives Acquire 34,900 Shares
HEALTHSOUTH CORP: Executives Buy Shares of Stock, Disclose Stake
HELIX ENERGY: Moody's Reviews 'B2' Ratings for Possible Downgrade

HEXION SPECIALTY: Inks $1BB Huntsman Settlement; Merger Canceled
HEXION SPECIALTY: Restates 1st and 2nd Quarter 2008 Financials
HIDDEN SPLENDOR: Confirms Plan, Nears Emergence
HINES HORTICULTURE: Bid Procedures Ok'd; Dec. 16 Sale Hearing Set
HOVNANIAN ENTREPRISES: Fitch Affirms Issuer Default Rating at 'B-'

HUNTSMAN CORP: Drops Merger, Gets $1B from Hexion & Apollo
INDALEX HOLDING: S&P Cuts Rating on Senior Secured Notes to 'CCC-'
JOSEPH MALONE: Voluntary Chapter 11 Case Summary
KB HOME: Fitch Downgrades Issuer Default Rating to 'BB-'
KB TOYS: Gets Court's Approval to Pay 10,900 Employees

KB TOYS: Returns to Bankruptcy Due to Rapid Decline in Sales
KEY PLASTICS: Financial Woes Cue Chapter 11; Files Prepack Plan
KEY PLASTICS: Case Summary & 30 Largest Unsecured Creditors
KRISPY KREME: Posts $5.9MM Net Loss in Quarter Ended November 2
LANDAMERICA FINANCIAL: Amends Stock Buy Agreement W/ Fidelity

LANDSBANKI ISLAND: Luxembourg Bank Unit to Be Liquidated
LEAR CORPORATION: Moody's Lowers Corporate Family Rating to 'B3'
LEHMAN BROTHERS: Fitch Withdraws D Long-Term Issuer Default Rating
LEHMAN BROTHERS: Jarden Wants to Oust Lehman Unit as Loan Agent
LENNAR CORPORATION: Fitch Lowers Issuer Default Rating to 'BB+'

LEVEL 3 COMMUNICATIONS: CEO J. Storey Gets President and COO Posts
LEVEL 3 COMMUNICATIONS: President and Fairfax Fin. Disclose Stake
LEVEL 3 COMMUNICATIONS: Directors Sell, Purchase Shares of Stock
LINEAR TECHNOLOGY: Capital World Discloses 11% Equity Stake
LINEAR TECHNOLOGY: Board OKs Amendment of Robert Swanson Deal

M/I HOMES: Fitch Downgrades Issuer Default Rating to 'B'
MANCHESTER INC: Pre-Emergence Stock Cancelled; Now Privately Owned
MARVEL ENTERTAINMENT: Settlement Agreement with Perelman Approved
MAXTOR CORP: S&P Cuts Senior Unsecured Rating to 'B'
MERITAGE HOMES: Fitch Affirms Issuer Default Ratings at 'B+'

MERVYN'S LLC: Proposes Feb. 18 as Administrative Claims Bar Date
MERVYN'S LLC: Seeks to Hire Streambank as IP Consultant
MERVYN'S LCC: Former Employees Sue to Recover ERISA Benefits
MERYVN'S LLC: New Retailers Acquire 22 Macerich-Owned Sites
MESA ROYALTY: NYSE Extends Trustee's 10-K Filing until April 15

MGM MIRAGE: Will Sell Treasure Island Hotel to Ruffin for $775MM
MERRILL LYNCH: S&P Junks Ratings on 6 Classes From 12 RMBS
MERRITT FUNDING: Moody's May Further Cut Junk Ratings on 6 Notes
MIAMI BEACH: S&P Changes Rating to 'BB' on $268.4 Mil. Bonds
MORGAN STANLEY: Fitch Lowers Ratings on $7.523 Mil. Notes to 'B+'

MORGAN STANLEY: S&P Downgrades Rating on $3 Mil. Notes to 'B-'
MOTOR COACH: Creditors Committee Opposes Disclosure Statement
NATIONAL CONSUMER: Fitch Downgrades Individual Rating to 'B/C'
NORTEL NETWORKS: To Cure NYSE Average Closing Price Non-Compliance
NUVEEN INVESTMENTS: Moody's Lowers Corporate Family Rating to 'B2'

PENN TRAFFIC: Incurs Nine Month Loss of $21.4 Million
PERRY REALTY: Case Summary & 13 Largest Unsecured Creditors
PILGRIM'S PRIDE: Incurs $1.06B Operating Loss for FY2008
PILGRIM'S PRIDE: Seeks to Pay Amounts Owed to Employees
PLCP LP: Files for Chapter 11 After Ethanol Production Halt

PLY GEM: S&P Cuts Corporate Credit Rating to 'B-'; Outlook Neg.
POWDER RIVER: Case Summary & 20 Largest Unsecured Creditors
PRIMEDIA INC: S&P Downgrades Rating on $350 Mil. Facility to 'BB-'
PRIMUS GUARANTY: S&P Junks Long-Term Counterparty Credit Rating
PROGENICS PHARMACEUTICALS: To Cure Nasdaq Listing Non-Compliance

PULTE HOMES: Fitch Downgrades Issuer Default Rating to 'BB+'
QUANTUM CORPORATION: Moody's Reviews 'B3' Ratings for Likely Cuts
QUESTEX MEDIA: Shortfall in Revenue Cues Moody's Junk Ratings
QSOUND LABS: Has Until Dec. 23 to Submit Nasdaq Compliance Plan
RACE POINT: Fitch Downgrades Ratings on Seven Classes of Notes

RACE POINT: Fitch Affirms Ratings on Eight Classes of Notes
RELIANT ENERGY: Breakup Fee Appeal Survives Sale of Property
RESIDENTIAL CAPITAL: Fitch Takes Servicer Rating Actions
RESIDENTIAL CAPITAL: GMAC Extends Offerings Until December 26
RESIX FINANCE: Moody's Downgrades Ratings on 71 Tranches

RYLAND GROUP: Fitch Downgrades Issuer Default Rating to 'BB'
SALLY HOLDINGS: S&P Raises Corporate Credit Rating to B+ From B
SEAGATE TECH: S&P Cuts Senior Unsecured Rating to 'BB-'
SECURUS TECHNOLOGIES: S&P Affirms 'B-' Issue-Level Rating
SIMMONS BEDDING: Lenders Extend Forbearance Period to March 2009

SLANE 840: Auction Sale of Pledged Collateral Set for Jan. 7
SPECIAL DEVICES: Fails to Refinance Debt, Files for Chapter 11
SPANSION INC: Fitch Sees Likely Default, Junks Ratings on $1B Debt
SPECIAL DEVICES: Case Summary & 30 Largest Unsecured Creditors
STANDARD PACIFIC: Fitch Affirms Issuer Default Rating at 'B-'

STANDARD STEEL: Moody's Affirms 'B2' Corporate Family Rating
SUPER SAVE: Voluntary Chapter 15 Case Summary
SYNCORA HOLDINGS: NYSE Suspends Common Stock Trading on Dec. 17
TENSYR LTD: Moody's Downgrades Ratings on Two Note Classes to Ca
TPG-AUSTIN: Fearful Lehman's Inaction Will Cue Own Ch. 11 Filing

TRIBUNE CO: Wants to Enjoin Utilities From Ceasing Services
VENOCO INC: S&P Keeps B Subordinate Debt Rating; Outlook Stable
VESTA INSURANCE: Files Post-Confirmation Status Reports
VESTA INSURANCE: Trustee Seeks to Close Gaines' Chapter 11 Case
VILLAGE HOMES: Has Authority to Use Cash & Sell Homes

WELLMAN INC: Parties Object to Confirmation of Restructuring Plan
WHITING PETROLEUM: S&P Keeps BB- Sub. Debt Rating; Outlook Stable
YM BIOSCIENCES: Auditor Raises Going Concern Doubt
ZOO HF: Fitch Retains Junk Ratings on EUR12.5 Mil. Class D Notes

* Fitch Says U.S. CMBS Loan Extensions Won't Trigger Rating Cuts
* Moody's Sees Bankruptcy Risk Among Derivative Product Companies
* S&P Puts Junk Ratings on 8 Tranches From Seven CDO Deals

* Large Companies with Insolvent Balance Sheets


                             *********

155 EAST: Moody's Downgrades Corporate Family Rating to 'Ca'
------------------------------------------------------------
Moody's Investors Service downgraded 155 East Tropicana LLC's
corporate family rating and probability of default rating as well
as the rating on the $130 million 8.75% senior secured notes due
2012 to Ca from Caa3.  It also affirmed the SGL-4 speculative
grade liquidity rating.  The outlook is negative.  In Moody's
opinion, the deterioration of the economic conditions in Las Vegas
and the company's weakening liquidity profile make a default
likely in the next twelve months.  The default, as per Moody's
definition, could occur through the materialization of a
distressed exchange offer, a missed interest payment or bankruptcy
filing.

155 East Tropicana's revenues and EBITDA materially deteriorated
in the third quarter of 2008.  With $6.9 million of cash and cash
equivalent, including approximately $3.8 million of cage cash as
of September 30, 2008, and $5.1 million of revolver availability
immediately after the October 1, 2008 interest payment, Moody's
believes that the company may not be able to meet its 2009 bond
interest obligations of approximately $11.4 million.  The very
depressed economic environment that has affected Las Vegas casinos
is expected to continue into 2009 and it appears unlikely that the
company will generate sufficient cash flow to avoid a default in
the next twelve months.

Ratings downgraded to Ca from Caa3:

  - Corporate Family Rating

  - Probability of Default Rating

  - Rating of Senior Secured Notes due 2012 (LGD assessment
    revised to LGD4/56% from LGD4/57%)

The last rating action was on April 24, 2008 when Moody's lowered
155 East Tropicana LLC's corporate family rating to Caa3.

155 East Tropicana, LLC owns the Hooters Casino Hotel in Las
Vegas, Nevada.  The property is located one-half block from the
intersection of Tropicana Avenue and Las Vegas Boulevard, a major
intersection on the Las Vegas Strip.  The Hooters Casino Hotel
features a casino floor with 633 slot and video poker machines, 30
table games and 696 hotel rooms.  The company generated
approximately $61 million in net revenues in the last twelve month
period ended September 30, 2008.


ADVANTA CORP: Moody's Downgrades Senior Unsecured Ratings to 'B1'
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Advanta Corp.,
including its senior unsecured rating to B1 from Ba3, and assigned
a negative outlook.

The rating action reflects Moody's concerns regarding the sharp
erosion in Advanta's asset quality trends, heightened pressures on
its funding and liquidity, and the adverse effects of these
factors on the firm's core profitability as it navigates a highly
challenging environment for credit card lenders.

Advanta's delinquencies and loss rates have spiked sharply in the
course of 2008.  Moody's expects Advanta's asset quality
performance to continue to deteriorate in 2009 -- and quite
possibly into 2010 -- principally as the result of recessionary
conditions in the U.S. and the firm's concentrated exposures to
areas of the country experiencing the most severe economic
downturn.

Declining asset quality has given rise to increased loan loss
provisioning, which has been the principal driver of a substantial
decline in Advanta's profitability. Advanta posted a loss in Q3
2008 - even excluding non-recurring charges -- and Moody's
anticipates that losses may continue throughout 2009, and
potentially longer, as the company grapples with the effects of
the recessionary environment on the credit quality of its small
business card portfolio.

Regarding liquidity and funding, the cost and availability of
Advanta's access to securitization markets (which historically has
comprised approximately 60% of managed funding) have been
adversely affected by the intensification of the credit crunch.
This has caused the company to shift its funding model almost
entirely to deposit funding (including a substantial element of
brokered deposits), a situation which Moody's expects will
continue for the foreseeable future.  Although Advanta has been
able to fund efficiently through deposit channels to date --
amassing a significant liquidity portfolio -- the lack of access
to the ABS markets and increased level of funding concentration in
deposits -- where competition is intense - subjects the company to
additional risk, in Moody's view.

Advanta has responded to these developments by cutting back new
loan originations and implementing a revamped customer
segmentation strategy including significant price increases for
certain customer groups.  In Moody's view, this strategy -- while
sensible in light of current economic and market conditions -
involves significant execution risk, including potential franchise
impairment and "adverse attrition" of customers.

Moody's will actively monitor the progress of Advanta's retooled
strategy, as well as the company's success in preserving its
liquidity position at both its bank and holding company.  In
addition, a return to a stable outlook would be predicated on a
stabilization of asset quality and sustained improvement in
profitability from Advanta's core small business credit card
segment.

Ratings downgraded include these:

Advanta Corporation --

  -- Senior unsecured debt to B1 from Ba3
  -- Senior unsecured shelf to (P)B1 from (P)Ba3
  -- Subordinated debt to B3 from B2
  -- Subordinated shelf to (P)B3 from (P)B2
  -- Preferred Stock shelf to (P)Caa1 from (P)B3

The last rating action on Advanta was on September 22, 2008, when
Moody's placed the ratings under review for possible downgrade.

Advanta Corporation, headquartered in Spring House, PA, reported
approximately $7.7 billion in managed assets as of September 30,
2008.


AGRIPROCESSORS INC: Buyer Offers to Pay Off Secured Creditors
-------------------------------------------------------------
McClatchy-Tribune reports that Quantum Capital Partners Inc. has
offered a deal in the U.S. Bankruptcy Court for the Eastern
District of New York to acquire Agriprocessors Inc.

According to McClatchy-Tribune, the Quantum Capital filed to the
Court a letter of intent stating that it would pay off
Agriprocessors' secured creditors, including First Bank Business
Capital, the lender that initiated foreclosure proceedings against
Agriprocessors, in exchange for a major equity position in the
debtor.  The report says that the exact amount would depend on
what is left over after creditors are paid.  Quantum Capital also
submitted to the Court a $28 million letter of credit for use in
paying the obligation, the report states.

McClatchy-Tribune relates that Quantum Capital said that it is
prepared to inject $15 million into Agriprocessors to restart
operations, after acquiring First Bank's legal claims.

Quantum Capital, according to McClatchy-Tribune, asked for 10 days
to perform due diligence, to be able to determine if the assets
involved in the transaction are represented by the other party.

McClatchy-Tribune reports that Quantum Capital's first request of
keeping the Agriprocessors bankruptcy case in New York was denied
by the Chief Judge Carla Craig of the U.S. Bankruptcy Court for
the Eastern District of New York.  According to the report, Judge
Craig said that the case rightfully belongs in Iowa.

McClatchy-Tribune states that Marxx Theresias, a principal in
Quantum Capital, said that Agriprocessors' legal entanglements
weren't intended, adding that an experienced management group
interested in operating Agriprocessors approached Quantum Capital
for the acquisition of the bankrupt company.

                       About Agriprocessors

Headquartered in Postville, Iowa, Agriprocessors Inc. --
http://www.agriprocessor.com/-- operates a kosher meat and
poultry packing processors located at 220 North West Street.  The
company maintains an executive office with 50 employees at 5600
First Avenue in Brooklyn, New York.  The company filed for Chapter
11 protection on Nov. 4, 2008 (Bankr. E. D. N.Y. Case No. 08-
47472).  The case, according to McClatchy-Tribune, has been
transferred to Iowa.  Kevin J. Nash, Esq., at Finkel Goldstein
Rosenbloom & Nash represents the company in its restructuring
effort.  The company listed assets of $100 million to
$500 million and debts of $50 million to $100 million.


AMERICAN INT'L: Sells $39.3BB RMBS Portfolio to Maiden Lane
-----------------------------------------------------------
American International Group, Inc., reported that its U.S. life
insurance companies (Life Insurance Companies) have sold to Maiden
Lane II LLC (ML II) -- a newly formed Delaware LLC in which the
Federal Reserve Bank of New York is the sole member -- their
interests in a pool of $39.3 billion face amount of residential
mortgage-backed securities (RMBS) held by their agent, AIG
Securities Lending Corp., an AIG subsidiary, in connection with
AIG's U.S. securities lending program.  The agreement in principle
between AIG and FRBNY for this transaction was announced on
November 10, 2008.

AIG Chairperson and CEO Edward M. Liddy said, "AIG's highest
priority is the full repayment of the federal loan facility with
interest.  The creation and launch of this financing entity will
eliminate the liquidity issues associated with AIG's U.S.
securities lending program, which will facilitate our repayment
plan.  Although we have more work ahead of us, this is an
important step forward.  We appreciate the support of the Federal
Reserve Bank of New York in implementing this transaction."

FRBNY extended a senior loan to ML II to enable the purchase of
the RMBS for an initial purchase price of $19.8 billion.  The loan
has a six-year term, subject to extension by FRBNY.  It is secured
by the $39.3 billion face amount of RMBS and bears interest at
one-month LIBOR plus 1.0%.  The purchase price may be increased as
a result of the payment of the deferred contingent purchase price.

The Life Insurance Companies applied the initial consideration
from the sale of the RMBS, along with available cash and
$5.1 billion provided by AIG in the form of capital contributions
to the Life Insurance Companies to settle outstanding securities
lending transactions under AIG's U.S. securities lending program.
Included in the terminations were AIG's securities lending
transactions with FRBNY under the securities lending agreement
announced in October, which totaled approximately $20.5 billion at
December 12, 2008. As a result of these transactions, AIG's
October securities lending agreement with FRBNY and AIG's U.S.
securities lending program have been terminated.

To the extent there are sufficient net cash proceeds available to
ML II from the RMBS after the senior loan from FRBNY is repaid in
full, the Life Insurance Companies will be entitled to receive a
portion of the deferred contingent purchase price from ML II of up
to $1 billion plus interest at one-month LIBOR plus 3.0%.  After
this fixed amount of deferred contingent purchase price has been
paid, the Life Insurance Companies will be entitled to receive
one-sixth of any remaining net proceeds from the RMBS as
additional deferred consideration for the sale of the RMBS.

                 About American International Group

Based in New York, American International Group, Inc. (AIG) is the
leading international insurance organization with operation in
more than 130 countries and jurisdictions.  AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer.  In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world.  AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.

During the third quarter of 2008, requirements to post collateral
in connection with AIG Financial Products Corp.'s credit default
swap portfolio and other AIGFP transactions and to fund returns of
securities lending collateral placed stress on AIG's liquidity.
AIG's stock price declined from $22.76 on Sept. 8, 2008, to $4.76
on Sept. 15, 2008.  On that date, AIG's long-term debt ratings
were downgraded by Standard & Poor's, a division of The McGraw-
Hill Companies, Inc., Moody's Investors Service and Fitch Ratings,
which triggered additional requirements for liquidity.  These and
other events severely limited AIG's access to debt and equity
markets.

On Sept. 22, 2008, AIG entered into an $85 billion revolving
credit agreement with the Federal Reserve Bank of New York and,
pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000
shares of Series C Perpetual, Convertible, Participating Preferred
Stock to a trust for the benefit of the United States Treasury.
At Sept. 30, 2008, amounts owed under the facility created
pursuant to the Fed Credit Agreement totaled $63 billion,
including accrued fees and interest.

Since Sept. 30, AIG has borrowed additional amounts under the
Fed Facility and has announced plans to sell assets and businesses
to repay amounts owed in connection with the Fed Credit Agreement.
In addition, subsequent to Sept. 30, 2008, certain of AIG's
domestic life insurance subsidiaries entered into an agreement
with the NY Fed pursuant to which the NY Fed has borrowed, in
return for cash collateral, investment grade fixed maturity
securities from the insurance subsidiaries.

On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through
its Troubled Asset Relief Program, $40 billion of newly issued AIG
perpetual preferred shares and warrants to purchase a number of
shares of common stock of AIG equal to 2% of the issued and
outstanding shares as of the purchase date.  All of the proceeds
will be used to pay down a portion of the Federal Reserve Bank of
New York credit facility.  The perpetual preferred shares will
carry a 10% coupon with cumulative dividends.

AIG and the Fed also agreed to revise the existing FRBNY credit
facility.  The loan terms were extended from two to five years to
give AIG time to complete its planned asset sales in an orderly
manner.  The equity interest that taxpayers will hold in AIG,
coupled with the warrants, will total 79.9%.

At Sept. 30, 2008, AIG had $1.022 trillion in total consolidated
assets and $950.9 billion in total debts.  Shareholders' equity
was $71.18 billion, including the addition of $23 billion of
consideration received for preferred stock not yet issued.


ARCHWAY COOKIES: U.S. Trustee, Creditors Balk at Bonus Program
--------------------------------------------------------------
The U.S. Trustee and the official committee of unsecured creditors
formed in Archway Cookies LLC's bankruptcy case ask the Court to
deny the Debtor's bonus program for 28 remaining employees.

According to Bloomberg News, the U.S. Trustee and the Creditors
Committee assert that the paying retention bonuses to executives
are prohibited under the Bankruptcy Code.  Archway has submitted a
list of the 28 beneficiaries but did not identify whether any of
those are executives of the Debtor.  The U.S. Trustee has also
objected to Archway's decision to seal the list from the public.

As reported by the Dec. 8 edition of the Troubled Company
reporter, the U.S. Bankruptcy Court for the District of Delaware
has approved Lance, Inc.'s bid to purchase substantially all of
the assets of Archway.  Archer topped three other bidders at a
December 2, 2008 auction.  The Court declared Brynwood Partners VI
L.P. as backup bidder in the event Archway fails to close the
sale.

Under the terms of the Asset Purchase Agreement, Lance will
acquire substantially all of the assets of Archway Cookies for
approximately $30 million.  The transaction is expected to close
no later than Dec. 15, 2008.  Lance will use available liquidity
under its current credit facilities to fund the acquisition.

                       About Archway Cookies

Headquartered in Battle Creek, Michigan, Archway Cookies, LLC, --
http://www.archwaycookies.com/-- makes soft-baked cookies. And
crackers.  In 1998, Specialty Foods Corp. acquired the Debtors'
for about $100 million.

Parmalat Finanziaria of Italy acquired Mother's Cake and Cookie
Company and Archway Cookies from The Specialty Foods Acquisition
Corporation for $250 million in 2000.  Parmalat later sold its
North American Bakery Group, which includes the Archway brands,
Mother's brands and the U.S. and Canadian private label cookie
businesses, to the private equity firm Catterton Partners and
their operating partner Insight Holdings in 2005.

Archway Cookies filed for Chapter 11 protection on Oct. 6, 2008
(Bankr. D. Del. Case No. 08-12323).  Its affiliate, Mother's Cake
& Cookie Co. also filed for bankruptcy (Bankr. D. Del. Case No.
08-12326).  Michael R. Lastowski, Esq., at Duane Morris, LLP,
represent the Debtors in their restructuring efforts.  In their
filing, the Debtors listed estimated assets of between
$50 million and $100 million and estimated debts of between
$500 million and $1 billion.


BEAZER HOMES: Fitch Affirms 'B-' Issuer Default Rating
------------------------------------------------------
Fitch Ratings affirms Beazer Homes USA, Inc.'s Issuer Default
Rating and outstanding debt ratings:

  -- Issuer Default Rating at 'B-';
  -- Senior notes at 'CCC+/RR5';
  -- Convertible senior notes at 'CCC+/RR5';
  -- Junior subordinated debt at 'CCC-/RR6'.
  -- Secured revolving credit facility at 'BB-/RR1'.

The Rating Outlook is Negative.

The 'RR1' Recovery Rating on BZH's secured revolving credit
facility indicates outstanding recovery prospects for holders of
this debt issue.  The 'RR5' on BZH's senior unsecured notes
indicate below-average recovery prospects for holders of these
debt issues.  BZH's exposure to claims made pursuant to
performance bonds and joint venture debt and the possibility that
part of these contingent liabilities would have a claim against
the company's assets were considered in determining the recovery
for the unsecured debt holders.  The 'RR6' on BZH's junior
subordinated notes indicate poor recovery prospects in a default
scenario.  Fitch applied a liquidation value analysis for these
RRs.

The ratings reflect the current very difficult housing environment
and Fitch's expectations that housing activity will be even more
challenging than previously anticipated throughout 2009.  The
recessionary economy, poor consumer confidence and impaired
mortgage markets are, of course, contributing to the housing
shortfall.  The ratings also reflect negative trends in BZH's
operating margins, further deterioration in credit metrics
(especially interest coverage and debt/EBITDA ratios), erosion in
tangible net worth from non-cash real estate charges and operating
losses which have led to high debt leverage.  Fitch notes there is
potential for lower cash flow from operations next year relative
to fiscal 2008.

Earlier in calendar 2008 BZH filed its financials for fiscal year
2007 and its 2008 first, second and third quarter 10Qs.  BZH is
now current on all of its required SEC filings.  While BZH's audit
committee has completed its independent investigation and the
company has settled with the SEC, it is still under investigation
by the U.S. Attorney's Office, which has the potential to result
in regulatory fines.

In August 2008, BZH completed the amendment to its revolving
credit facility.  As part of the amendment, the commitments under
the revolving credit facility were reduced from $500 million to
$400 million and the collateralization requirement was increased.
The size of the secured revolving credit facility was recently
reduced to $250 million as the company's consolidated tangible net
worth fell below $350 million.  The revolver is subject to further
reduction to $100 million if the company's consolidated TNW falls
below $250 million.

At Sept. 30, 2008, BZH's consolidated TNW (for purposes of this
covenant) was $314.4 million.  As a result of the reduced credit
facility, the collateral coverage requirement increased from 3.0
times to 4.5x the amount of outstanding loans and letters of
credit.  At Sept. 30, 2008, BZH had no outstandings under the
revolver and $61.2 million of letters of credit outstanding.  BZH
had no availability under the revolver at the end of September.

The company intends to add approximately $250 million of
additional real estate assets to the borrowing base over the next
12 months, which would provide up to $35 million in additional
borrowing base availability.

BZH completed its fiscal 2008 (ended Sept. 30, 2008) with $584.3
million of cash on the balance sheet.  Cash from operations during
the 2008 fiscal year totaled $315.6 million, which included the
receipt of $59.2 million of cash tax refund relating to a 2007 net
operating loss carry back.  BZH expects to receive an additional
cash refund of approximately $150 million during the first half of
its fiscal year 2009.

Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as trends
in land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new order
activity, debt levels and free cash flow trends and uses.


BERNARD L. MADOFF: Irving Picard Appointed as SIPA Liquidator
-------------------------------------------------------------
The Securities Investor Protection Corporation (SIPC), which
maintains a special reserve fund authorized by Congress to help
investors at failed brokerage firms, announced on Mon., Dec. 15,
that it is liquidating Bernard L. Madoff Investment Securities LLC
of New York, N.Y., under the Securities Investor Protection Act
(SIPA).

SIPC filed an application with the United States District Court
for the Southern District of New York for a declaration that the
customers of Bernard L. Madoff Investment Securities LLC are in
need of the protections available under SIPA.  The United States
District Court for the Southern District of New York granted the
application and appointed Irving H. Picard, Esq., as trustee for
the liquidation of the brokerage firm, and further appointed the
law firm of Baker & Hostetler LLP as counsel to Mr. Picard.

SIPC President and CEO Stephen Harbeck said: "Upon information
provided by the United States Securities and Exchange Commission
and the Financial Industry Regulatory Authority, it is clear that
the customers of the Madoff firm need the protections available
under federal law. Mr. Picard has served as trustee in more
brokerage firm liquidations than any other individual. SIPC and
the trustee are dedicated to returning assets to customers as
promptly as possible."

Mr. Harbeck cautioned, however, that the scope of the
misappropriation and the state of the defunct firm's records will
make this more difficult than in most prior brokerage firm
insolvencies. "It is unlikely that SIPC and the Trustee will be
able to transfer the customer accounts of the firm to a solvent
brokerage firm. The state of the firm's records may preclude a
transfer of customer accounts. Also, because the size of the
misappropriation has not yet been established, it is impossible to
determine each customer's pro rata share of `customer property'."

The trustee is charged with giving notice of the proceeding and
mailing claim forms to the customers and other creditors of the
firm.  Information about the case also will be made available on
the Web at http://www.sipc.org/

Mr. Picard stated that he is acutely aware of the concern of
investors who have been caught up in this financial scandal. "I
will work with SIPC to do what the law allows to ameliorate the
losses to customers.

                     About Bernard L. Madoff

Bernard L. Madoff Investment Securities LLC is a leading
international market maker.  The firm has been providing quality
executions for broker-dealers, banks, and financial institutions
since its inception in 1960.  During this time, Madoff has
compiled an uninterrupted record of growth, which has enabled us
to continually build our financial resources.  With more than $700
million in firm capital, Madoff currently ranks among the top 1%
of US Securities firms.

As reported by the Troubled Company Reporter on Dec. 15, 2008, the
Securities and Exchange Commission has charged Bernard L.
Madoff and his investment firm, Bernard L. Madoff Investment
Securities LLC, with securities fraud for a multi-billion dollar
Ponzi scheme that he perpetrated on advisory clients of his firm.
The estimated the losses from Madoff's fraud were at least
$50 billion.


BIOXEL PHARMA: Seeks Protection Under CCAA; Gets $450,000 Facility
------------------------------------------------------------------
Bioxel Pharma Inc. has filed a petition seeking protection under
the Companies Creditors Arrangement Act.

"We regret having to take this measure and we will work closely
with our suppliers, employees and creditors in order to surmount
this difficult period while waiting for orders and a
recapitalization that will enable the Corporation to recover a
liquidity position assuring the continuance of its business," said
Olivier Meyer, president and chief executive officer of Bioxel.

The company has also negotiated with Investissement Quebec a
debtor-in-possession credit for up to $450,000 in order to have
access to immediate liquidity while reorganizing its business.
The company said the new financing would enable it to pay
employees, suppliers and other business partners for goods and
services received after the filing.

The company said it plans to review all available alternatives,
including finding a strategic partner to enhance the value of its
intellectual property and other assets, completing a business
combination with a strategic partner, and selling the business.

Headquartered in Quebec, Canada, Bioxel Pharma Inc. (TSX Venture:
BIP) -- http://www.bioxelpharma.com/-- makes and distributes
taxane pharmaceutical ingredients including paclitaxel, docetaxel,
9-DHB and 10-DAB.


BLYTH INC: S&P Cuts Corp. Credit & Sr. Unsec. Debt Ratings to B+
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit and senior unsecured debt ratings on Greenwich,
Connecticut-based Blyth Inc. to 'B+' from 'BB-'.  At the same
time, S&P withdrew the recovery and issue-level ratings on Blyth's
$75 million unsecured revolving credit facility, which the company
terminated on Dec. 5, 2008.  The outlook is stable.  As of
Oct. 31, 2008, the company had about $147 million of total funded
debt, excluding operating lease obligations.

"The rating actions reflect the company's weak operating results
in recent quarters that has affected credit measures and cash
flow, and weaker liquidity associated with Blyth's recent
termination of its unsecured revolving credit facility," said
S&P's credit analyst Rick Joy.

Significant input cost inflation and softer demand for highly
discretionary and highly seasonal products (nearly 60% of sales
take place in the second half of the year) have affected Blyth,
and as a result, challenged operating performance.  The U.S.
remains a difficult market for PartyLite, and the company faces
increasingly challenging conditions from a weak consumer spending
environment and competitive threats in the direct-selling market.

"However, the company's size and infrastructure provide it with
some economies of scale and allow it to service a diverse customer
base," he continued.

The outlook is stable.  Without the company's recently terminated
$75 million revolving credit facility, S&P would expect it to
maintain adequate cash on its balance sheet to fund its upcoming
debt maturity and working capital needs.  If operating performance
weakens further and credit measures deteriorate, and/or if the
company cannot maintain adequate liquidity, S&P could revise the
outlook to negative.  S&P estimates this could happen if EBITDA
declined another 40% and expected debt reduction did not occur,
which could cause leverage to approach the 4x area.  Although
unlikely over the near term, if the company can stabilize
operating performance while maintaining a strong liquidity
position, S&P could revise the outlook to positive.


BOLL WEEVIL: Files for Chapter 7 Liquidation, Shuts Down 6 Stores
-----------------------------------------------------------------
Penni Crabtree at SignOnSanDiego.com reports that Boll Weevil,
Inc., has shut down six stores last week after filing for Chapter
7 liquidation in the U.S. Bankruptcy Court for the Southern
District of California.

SignOnSanDiego.com says that the stores at these locations were
closed:

     -- Shelter Island,
     -- Mira Mesa,
     -- Bonita,
     -- San Marcos,
     -- La Mesa, and
     -- Lakeside.

Citing Boll Weevil restaurant manager Mindy Gretler,
SignOnSanDiego.com relates that the store shutdowns have affected
60 to 70 workers, most are owed weeks of back wages.

SignOnSanDiego.com states that four other Boll Weevil restaurants
in Lemon Grove, Imperial Beach, Clairemont Mesa, and Ramona that
are owned by independent franchisees aren't included in the
bankruptcy filing.

Boll Weevil filed for Chapter 11 protection in 1996, and reemerged
in 1997 with about 17 restaurants and eight franchised units,
SignOnSanDiego.com says.  The California Labor Commission
temporarily closed 12 of Boll Weevil restaurants in 2004 after
investigators found out that 169 of the company's employees didn't
have compensation insurance protection, according to
SignOnSanDiego.com.  The report says that after Boll Weevil
granted the insurance to the workers, the stores were reopened and
the firm was fined about $100,000.

Boll Weevil, according to SignOnSanDiego.com, again filed for a
Chapter 11 bankruptcy in July 2007.  The company had six
restaurants and four franchises at that time, the report states.

SignOnSanDiego.com reports that Boll Weevil listed assets of about
$1.1 million and debts of about $2.7 million.

Boll Weevil, Inc., is a landmark San Diego restaurant chain
founded by the late Fred Halleman.


CADENCE INNOVATION: Withdraws Motion to Auction 3 Plants
--------------------------------------------------------
Bill Rochelle of Bloomberg News reports that Cadence Innovation
LLC has abandoned the idea of selling three Michigan plants at
auction.

Patrick J. Reilley, Esq., at Cole Schotz, Meisel, Forman &
Leonard, P.A., in Wilmington, Delaware, informed the U.S.
Bankruptcy Court for the District of Delaware that Cadence has not
reached an agreement with General Motors Corp. and Chrysler LLC,
its principal customers.  Assuming an agreement is reached, the
hearing will go as planned, he said.

Cadence had said it would withdraw the sale motion if it couldn't
reach agreements with GM and Chrysler.

Cadence earlier filed a motion with the Court to sell three plants
in Chesterfield, Hillsdale and Groesbeck, where Cadence performs
the manufacturing of component parts supplied to General Motors
Corporation and Chrysler LLC.  The Chesterfield Plant has 1018
employees, the Groesbeck Plant has 198 employees,
and the Hillsdale Plant has 190 employees.

The Debtors' DIP Financing Agreement and Accommodation Agreements
are conditioned on the Debtors' commitment to take actions
necessary to sell all or substantially all of their businesses,
pursuant to an agreed schedule which includes a October 31, 2008
deadline to execute a definitive asset purchase agreement, and to
close the sale by December 15, 2008.  The DIP Financing will
expire no later than December 31, 2008.

If a purchase offer acceptable to the Debtors is not received,
the Debtors reserve the right to withdraw their Sale Motion
without prejudice, and to pursue an orderly liquidation of the
Plants to maximize the recoveries from those sales for the
benefit of their estates and creditors.

                    About Cadence Innovation

Headquartered in Troy, Michigan, Cadence Innovation LLC --
http://www.cadenceinnovation.com/-- manufactures and sells auto
parts to its customers GM and Chrysler.  The company has at least
4,200 employees in the United States and Europe, including Hungary
and Czech Republic.  The company and its debtor-affiliate, New
Venture Real Estate Holdings, LLC, filed for Chapter 11
reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08-
11973).  Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at
Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as
counsel.  When the Debtors filed for protection from their
creditors, they listed assets of between $10 million and
$50 million, and debts of between $100 million and $500 million.
(Cadence Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


CENTEX CORP: Fitch Downgrades Issuer Default Rating to 'BB'
-----------------------------------------------------------
Fitch Ratings has downgraded Centex Corp.'s Issuer Default Rating
and outstanding debt ratings:

  -- IDR to 'BB' from 'BB+';
  -- Senior unsecured notes to 'BB' from 'BB+';
  -- Unsecured bank credit facility to 'BB' from 'BB+'.

Fitch has also affirmed CTX's 'B' short-term IDR and commercial
paper.

The Rating Outlook remains Negative.

The downgrade reflects the current very difficult housing
environment and Fitch expectations that housing activity will be
even more challenging than previously anticipated throughout
calendar 2009.  The recessionary economy and impaired mortgage
markets are, of course, contributing to the housing shortfall.
The ratings changes also reflect negative trends in CTX's
operating margins, further deterioration in credit metrics
(especially interest coverage and debt/EBITDA ratios) and erosion
in tangible net worth from non-cash real estate charges and more
recently operating losses, which have led to untypically high debt
leverage.  As of Sept. 30, 2008, CTX's leverage as measured by
debt to capitalization was 61%, which is higher than management's
historical targeted range of approximately 35%-45%.  However,
CTX's liquidity position provides a buffer and supports the new
ratings.  Fitch notes there is potential for lower cash flow from
operations next year relative to fiscal 2009.

Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as land
and development spending, general inventory levels, speculative
inventory activity (including the impact of high cancellation
rates on such activity), gross and net new order activity, debt
levels and free cash flow trends and uses.

CTX's ratings are supported by the company's strong management
team, historically conservative financial policy and the strength
and geographic diversity of its core homebuilding operations. The
economies associated with large builders, significant geographic
diversification, consistency of performance over an extended
period of time, relatively low cost operating structure and a
return-on-capital focus provide the framework to somewhat soften
the margin impact of declining market conditions.

In the current environment CTX's strategic focus is on asset
management, asset efficiency and asset valuation risk assessments.
CTX has continued to narrow the scope of its business to
homebuilding, selling its subprime and home equity lending
operations in July 2006 followed by the sale of its commercial
construction operations in March 2007.  In April 2008, CTX sold
its home services operations and received $134.6 million of cash.

Additionally, there will be limitations on asset growth:
significant land purchases have to be re-approved, and there will
be limits on off-balance sheet finance.  There is an increased
emphasis on asset turns at each division level.  There is also an
emphasis on reducing inventory levels.  In March 2008, the company
sold a portfolio of 27 properties (consisting of 8,545 lots) to a
joint venture and sold a portfolio of five resort/second home
properties to a third party.  CTX generated $1.97 billion of cash
flow from operations during the latest-twelve months from
Sept. 30, 2008.  CTX ended the September quarter with $1.3 billion
of cash on the balance sheet.

CTX controls roughly a 3.5-year supply of land based on latest 12
months home deliveries, 84.2% of which are owned and the balance
controlled through options.  (The options share of total lots
controlled is down sharply over the past two years as the company
has written off substantial numbers of options.)


CHARTER COMMUNICATIONS: Moody's Downgrades PDR Ratings to 'Ca'
--------------------------------------------------------------
Moody's Investors Service lowered the Probability-of-Default
Rating for Charter Communications, Inc. to Ca from Caa2 and placed
all ratings (other than the SGL3 Speculative Grade Liquidity
Rating) for the Company and its subsidiaries under review for
possible downgrade.

The rating actions are prompted by the announcement that financial
advisors have been engaged to initiate discussions with
bondholders.  "Charter's ratings have long reflected a high
probability of default and a fundamental mismatch between the
Company's liability structure and its business model," noted
Moody's Senior Vice President Russell Solomon.  The Ca PDR
specifically reflects Moody's expectation that default (beyond
those that occurred via various distressed exchanges over the last
couple of years) is imminent and that a restructuring of the
Company's balance sheet via some form of a much more material
distressed exchange or bankruptcy filing is likely to occur pre-
emptively in 2009, notwithstanding the sufficiency of liquid
resources to maintain operations into 2010.  Given the current
state of the capital markets, Moody's believes that some
meaningful restructuring may now finally be more palatable for all
affected parties, although the complexity posed by the Company's
multiple creditor classes may render an in-court restructuring
process as the more likely format for resolution in Moody's
estimation.

The review will focus on the materiality of financial deleveraging
that can be effected via a restructuring and the specific form
that such a restructuring is likely to take.  "Moody's continues
to believe that at least $7 billion of the company's approximately
$22 billion of rated debt obligations needs to be equitized,"
noted Solomon.  Debt reduction of this magnitude should
sufficiently mitigate (if not entirely eliminate) the Company's
highly cash absorptive financial profile, which historically has
been significantly constrained by heavy debt service costs related
to its excessively leveraged and unsustainable capital structure.

Moreover, rising debt service costs following heavy but necessary
capital investment activity and ensuing liquidity-enhancing debt
exchanges (albeit at higher interest rates) over the past few
years have at times outpaced operational improvements.  Depending
on the final construct of the expected restructuring --
specifically the magnitude of change in junior-ranking liabilities
which are the primary candidates for loss absorption -- and given
the historical positioning of ratings in contemplation of this
eventuality, the magnitude of requisite downgrades for any given
credit class is expected to be minimal (and some ratings, with a
specific bias towards the senior-most secured claims, may be just
as likely to be confirmed at current levels).

These summarizes Moody's ratings (note that LGD point estimates
are subject to change pending conclusion of the rating review) for
the Company and the rating actions:

Charter Communications, Inc.

  * Corporate Family Rating -- Caa1, Review for Downgrade

  * Probability-of-default Rating -- to Ca from Caa2, Review for
    Downgrade

  * Senior unsecured notes -- Ca (LGD5 -- 87%), Review for
    Downgrade

Charter Communications Holdings, LLC

  * Senior unsecured notes -- Ca (LGD5 -- 85%), Review for
    Downgrade

CCH I Holdings, LLC

  * Senior unsecured notes -- Caa3 (LGD5 -- 77%), Review for
    Downgrade

CCH I, LLC

  * Senior secured notes -- Caa3 (LGD4 -- 60%), Review for
    Downgrade

CCH II, LLC

  * Senior unsecured notes -- Caa2 (LGD3 -- 42%), Review for
    Downgrade

CCO Holdings, LLC

  * Senior unsecured notes -- Caa1 (LGD3 -- 34%), Review for
    Downgrade

  * Senior secured (1st lien - stock only) Term Loan -- B3 (LGD2 -
    - 29%), Review for Downgrade

Charter Communications Operating, LLC

  * Senior secured (2nd lien - all assets) notes -- B3 (LGD2 --
    23%), Review for Downgrade

  * Senior secured (1st lien - all assets) Revolver & Term Loan --
    B1 (LGD1 -- 6%), Review for Downgrade

  * Speculative Grade Liquidity Rating -- SGL-3, Unchanged

The last rating action for Charter Communications was on July 2,
2008, when Moody's affirmed the company's Caa1 Corporate Family
Rating and its Caa2 Probability-of-Default Rating.

Headquartered in St. Louis, Missouri, Charter Communications is a
domestic multiple system cable operator serving approximately
5.1 million basic video subscribers.


CHARTER COMMUNICATIONS: S&P Junks Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Charter Communications Inc. to 'CC' from 'B-'.  The
rating outlook is negative.

At the same time, S&P placed all of its issue-level ratings on the
company's debt on CreditWatch with developing implications,
meaning that they could be either raised or lowered.  The St.
Louis, Missourri-based cable television operator had over
$21 billion of reported debt at Sept. 30.

The rating actions follow Charter's announcement that it has asked
Lazard LLC to initiate discussions with the company's bondholders
concerning financial alternatives to improve the company's balance
sheet.  S&P has noted for some time that Charter has inadequate
liquidity and, specifically, that it would not have the capacity
to meet its approximately $1.9 billion of debt maturities in 2010.
Further, the company's excessive debt burden equates to over
$4,000 per basic video subscriber -- a level that may exceed the
market value of its subscriber base.

S&P believes the most likely scenario is that Charter will offer
to exchange at least some portion of its bonds for equity, or a
combination of equity and debt, at a steep discount to face value.
Given Charter's excessive debt level and the problematic upcoming
maturities, S&P would consider such an offer to be a distressed
exchange and tantamount to a default on the involved issues.  At
this time, S&P cannot speculate on when such a potential
distressed exchange offer would be made or which bond issues would
be targeted.

"If Charter were to complete one or more distressed exchange
offers, S&P anticipate lowering the corporate credit rating to
'SD' (indicating a selective default), and lowering ratings on the
exchanged issues to 'D'," explained S&P's credit analyst Richard
Siderman.  "Shortly thereafter, S&P would reassign a new corporate
credit rating to Charter.  The developing CreditWatch implications
on Charter's debt indicate the possibility that the new corporate
credit rating could be as high as 'B' and, therefore, the issue-
level ratings on the debt remaining after the exchange(s) could
possibly be raised."

In determining the potential for a 'B' corporate credit rating,
S&P would examine how the debt exchanges, if consummated, would
impact overall leverage and the manageability of debt maturities.
Charter would need to realize sufficient debt reduction to enable
the company to begin to generate positive free cash in order to
warrant a 'B' rating.


CHESAPEAKE ENERGY: S&P Affirms Corporate Credit Rating at 'BB'
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its rating on
Chesapeake Energy Corp., including the 'BB' corporate credit
rating, and removed the ratings from CreditWatch, where they had
been placed with positive implications on July 9, 2008.  The
outlook is stable. As of Sept. 30, 2008, Oklahoma City-based
Chesapeake had $14 billion in debt.

"The ratings actions primarily reflect concerns about falling
natural gas prices, and S&P's reduced confidence that Chesapeake
will improve near-term financial leverage measures," said S&P's
credit analyst David Lundberg.  "Chesapeake has an investment-
grade caliber business risk profile, but the company's aggressive
financial profile weighs on overall ratings.  S&P believes that
liquidity remains adequate."

Chesapeake's satisfactory business risk profile enables the
company to maintain somewhat higher debt levels relative to most
'BB' rated peers.  With 12 trillion cubic feet equivalent of total
proved reserves and 2.3 billion cubic feet equivalent of daily
production, Chesapeake ranks among the largest independent
exploration and production companies in North America.  Operations
are well-diversified geographically, and the company has good
production growth prospects in several unconventional natural gas
resource plays such as the Barnett, Fayetteville, Haynesville, and
Marcellus Shales.

Chesapeake's financial risk profile is aggressive, and credit
measures have worsened in recent quarters.  During the first nine
months of 2008, funded debt increased by $3.4 billion, and the
company entered into three new VPP (volumetric production payment)
transactions, which S&P considers to have certain debt
characteristics.


CHRYSLER LLC: Default Risk Hinges on Government Action, S&P Says
----------------------------------------------------------------
Standard & Poor's Ratings Services said that, in light of the U.S.
Senate's rejection of an emergency loan package for General Motors
Corp. and Chrysler LLC, the risk of default by one or both of
these companies over the next few months remains very high.  The
Bush Administration said it will consider using funds
earmarked for the financial industry stabilization package to
support the U.S. automakers' near-term liquidity needs.  The U.S.
Treasury said it stands ready to prevent an imminent failure of
the automakers.  However, the Treasury has not yet indicated how
the automakers can access the funding provided through the
Troubled Asset Relief Program, or TARP.

It is also uncertain where TARP loans would stand in the automaker
capital structure.  Ford Motor Co. is not currently seeking
federal loans, primarily because it has a large unused bank
facility.  The current ratings on all three automakers already
reflect their high default risk and are therefore not changed by
the U.S. Senate vote.

S&P applies ratings in the 'CCC' category to companies that are
highly likely to default on a debt payment and that depend on
multiple factors beyond their control to meet their financial
commitments.  The 'CC' rating on GM reflects these risks, as well
as the company's stated intention that it will seek to reduce its
current debt burden by more than half as it attempts to reduce
cash outflows and win support for the U.S. government-backed
loans.  S&P believes the most likely scenario is that GM will
offer to exchange some or all of its outstanding debt for equity
or new debt at a steep discount to face value.  Given GM's
weakening liquidity position, S&P considers such an offer to be a
distressed exchange and, as such, is tantamount to a default.

In S&P's view, the catalyst for a GM or Chrysler bankruptcy in the
very near term is unchanged: liquidity dropping below the minimum
levels needed to operate their capital-intensive vehicle
manufacturing businesses.  The automakers ordinarily make
substantial payments to their suppliers early each month, and S&P
believes the several billion dollars in outlays expected during
the first few days of January 2009 could use up a substantial
portion of both companies' respective cash balances, unless U.S.
government support of some kind is forthcoming or the suppliers
defer these payments.  Consumer demand in the U.S. and other key
markets has only worsened since these companies first said they
might not have enough cash to support operations into early next
year.  In addition, S&P believes concerns about bankruptcies have
added to the declines in GM's and Chrysler's sales and therefore
heightened their cash use.

In addition, S&P remains concerned about the spillover effects of
an automaker failure on the North American parts suppliers.  Many
important suppliers sell parts to more than one automaker, and as
S&P has stated previously, if GM or Chrysler should file for
bankruptcy, withhold payments to suppliers, or be forced to halt
operations, the repercussions to the suppliers would be dramatic.
S&P placed 15 suppliers on CreditWatch with negative implications
on Nov. 13, 2008, as a result of their significant exposure to the
Michigan-based automakers.

Ford's liquidity remains materially better than that of the other
two Michigan-based automakers.  However, if GM or Chrysler were to
file for bankruptcy, Ford may have to use its liquidity to keep
its supply base intact.

S&P's recovery ratings on U.S. automaker debt are based on the
assumption of a bankruptcy filing, multi-year reorganization, and
eventual emergence.  These ratings are not affected by the
developments.  Expected recovery prospects for secured and
unsecured debtholders vary by automaker, largely reflecting the
company-specific mix of secured and unsecured debt in the capital
structure rather than vastly different fundamentals for each
company.

                          Ratings List

                      General Motors Corp.

         Corporate Credit Rating          CC/Negative/--

         Senior Secured                   CCC
           Recovery Rating                1

         Senior Unsecured                 CC
           Recovery Rating                4

                          Ford Motor Co.

        Corporate Credit Rating           CCC+/Negative/--

         Senior Secured                   CCC+
           Recovery Rating                3

         Senior Unsecured                 CCC-
           Recovery Rating                6

                         Chrysler LLC

        Corporate Credit Rating          CCC+/Negative/--

         Senior Secured
          $7 bil. first-lien term bank ln
          due 2013                        B
           Recovery Rating                1

          $2.0 bil. second-lien bank ln
          due 2014                        CCC+
           Recovery Rating                4


CIRCUIT CITY: Seeks to Extend Lease Decision Period Until March 10
------------------------------------------------------------------
Circuit City Stores Inc. asks the U.S. Bankruptcy Court for the
Eastern District of Virginia to extend the period within which it
may either reject or assume leases to March 10, 2009.

Section 365(d)(4) of the Bankruptcy Code provides that an
unexpired lease of nonresidential real property under which the
debtor is the lessee will be deemed rejected, and the trustee
will immediately surrender that property to the lessor, if the
trustee does not assume or reject the lease by the earlier of (i)
the date that is 120 days after the Petition Date, or (ii) the
date of the entry of an order confirming a plan of
reorganization.

However, Section 365(d)(4)(B) provides that the Court may extend
the lease disposition period, prior to the expiration of the 120-
day period, for 90 days on the request of the trustee or lessor
for cause, and the Court may grant a subsequent extension only
upon prior written consent of the lessor in each instance.

By this motion, the Debtors ask the Court to extend the time
within which they may assume or reject their unexpired leases of
nonresidential real property, including subleases or other
agreements to which any of the Debtors are a party that may be
considered an unexpired lease of nonresidential real property,
other than certain closing store leases and rejected leases.

Specifically, the Debtors ask the Court to grant a 90-day
extension of the original 120-day period within which they must
assume or reject the Leases.  Absent the relief requested, the
Debtors' period for assuming or rejecting the Leases will expire
on March 10, 2009.

Although it may seem premature to seek an extension of the Lease
Assumption Deadline within the first 30 days of the bankruptcy
cases, the sought extension is not only warranted, but also
necessary based on the facts and circumstances of the cases,
avers the Debtors' proposed counsel, Gregg M. Galardi, Esq., at
Skadden, Arps, Slate, Meagher & Flom, LLP, in Wilmington,
Delaware.

Mr. Galardi notes that the Debtors have already made significant
progress in evaluating their store-level operations having
determined already that nearly 300 leases are unnecessary to
their continued retail operations.  He adds that as the Court was
advised at the "First Day" hearing, certain requirements of the
Debtors' DIP Financing impose upon them an obligation to seek the
requested extension.

On the Petition Date, the Debtors filed a request to reject 144
leases -- the Rejected Leases -- which were leases under which
the Debtors no longer had retail operations.  The Debtors also
sought and obtained the Court's approval to continue store
closing sales at 154 stores.  The Debtors' determination to
conduct store closing sales at those locations was based on
various factors, including store profitability and location, M.
Galardi relates.

Notwithstanding their previous requests, the Debtors are far from
finishing their evaluation of their leasehold interests and,
thus, request the Court grant them an additional 90 days in which
to determine whether to assume or reject the Leases because,
among other reasons, a covenant under the DIP Facility requires
that them to do so, and they are in the process of stabilizing
their business operations and have not had a sufficient
opportunity to review the Leases to determine whether assumption
or rejection is warranted.

Mr. Galardi contends that by granting the sought extension, the
Debtors will be in a position to continue their business, which
will benefit all other parties-in-interest, including the
landlords for the Leases.  Thus, he says, it is necessary to the
success of the Debtors' cases that the Court enters an order
extending the Lease Assumption Deadline.

Schedules of the Debtors' unexpired Leases are available for free
at:

  http://bankrupt.com/misc/List_of_Leases_1.pdf
  http://bankrupt.com/misc/List_of_Leases_2.pdf
  http://bankrupt.com/misc/List_of_Leases_3.pdf

                 About Circuit City Stores, Inc.

Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments: domestic and international.

Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653).  InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.

Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel.  The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as
financial advisors. The Debtors' Canadian general restructuring
counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson
Consultants LLC is the Debtors' claims and voting agent.

The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.

(Circuit City Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


CIRCUIT CITY: Presents Panasonic Settlement Agreement
-----------------------------------------------------
Circuit City Stores, Inc., and its affiliated debtors ask the U.S.
Bankruptcy Court for the Eastern District of Virginia to approve a
settlement agreement they entered into with Panasonic Corporation
of North America.

The Debtors and Panasonic Consumer Electronics Company previously
entered into a Consignment Agreement wherein Panasonic agreed to
provide certain goods to the Debtors on a consignment basis.
Panasonic has asserted that it filed UCC financing statements
with the Virginia Secretary of State and that it notified the
Debtors' then existing secured creditors with conflicting
security interest, of its purchase money security interest in the
Consigned Products.  Panasonic also advised the Debtors that the
Consignment Agreement would be terminated unless all past due
amounts were paid within 10 days.  In a November 6, 2008 letter,
Panasonic purported to terminate the Consignment Agreement and
instructed the Debtors to stop selling the Consigned Products
immediately.

The Debtors and Panasonic dispute whether Panasonic had a
contractual right to terminate the Consignment Agreement.  In
addition, the Debtors and Panasonic dispute whether the Debtors
had the right to sell, transfer, encumber or dispose of the
Consigned Products after termination of the Consignment
Agreement.

Pursuant to an interim agreement between the Debtors and
Panasonic, the Debtors have sold Consigned Products from
November 10, 2008, through November 16, 2008 and have paid
$3,770,565 plus additional amounts to Panasonic.  The Debtors have
requested that Panasonic deliver new products subject to credit
terms, however, Panasonic refused to do so unless the Debtors pay
$9,382,247, which Panasonic asserts is the amount due for
Consigned Products sold to the Debtors prepetition.  The Debtors,
however, believe that the Prepetition Consignment Claim is
$7,900,000, which is subject to certain chargebacks and set-offs
for $3,740,102.

Accordingly, the Debtors and Panasonic entered into the
Settlement Agreement to timely resolve certain of their disputes
without incurring the costs, delays and uncertainty of
litigation.  The material terms of the Settlement Agreement are:

  (i) Panasonic agrees to the postpetition sale of the Consigned
      Products provided that the Debtors will pay Panasonic the
      Wind-down Payments two days after the sale of a Consigned
      Product.

(ii) in the event a dispute arise over the amount of Wind-down
      Payments, the Debtors will pay the undisputed portion and
      the remainder will be placed in a segregated interest-
      bearing account, and if unresolved within two days, the
      dispute will be resolved by the Court.

(iii) subject to Court approval, to be obtained no later than
      December 10, 2008, the Debtors will pay the Undisputed
      Prepetition Consignment Claim plus other amounts due to
      Panasonic from prepetition sales of Consigned Products.

(iv) the Debtors and Panasonic will reconcile the amount of the
      Prepetition Consignment Claim prior to December 10, 2008.
      If reconciliation is not achieved by December 10, the
      disputed portion of the Claim will be placed in an
      interest-bearing segregated escrow account, which release
      is subject to an agreement between the Debtors and
      Panasonic or Court approval.

  (v) Panasonic will ship new products to the Debtors on credits
      terms of up to $2 million payable in five days from
      invoice date, subject to, among others, Panasonic's
      receipt of full payment in cash of the Undisputed
      Prepetition Consignment Claim plus other amounts owing to
      Panasonic after reconciliation.

(vi) the Consignment Agreement will be deemed terminated as of
      November 6, 2008, and will no longer be in effect.

(vii) Panasonic reserves its right to seek allowance and payment
      of reclamation and Section 503(b)(9) claims, secured
      claims or other claims that Panasonic may hold against the
      Debtors or to enforce any right against the Debtors.

(viii) the Debtors will be entitled to offset the Chargeback
      Claim against distributions payable to Panasonic on
      account of any allowed claim or administrative expense,
      except for the Wind-Down Payments, Prepetition Consignment
      Claim or payments relating to any CIA Sale.  The offset
      will only be to the extent that the Chargeback claim is
      either undisputed or the Chargeback Claim is determined by
      the Court.  The Debtors reserve their right to seek direct
      payment of the Chargeback Claim.

The Debtors are in the view that a probable outcome in litigation
with Panasonic is that Panasonic has a perfected consignment
interest in the Consigned Products and an administrative expense
claim under Section 503(b)(9) for the merchandise received by the
Debtors.  Moreover, Panasonic would likely be entitled to
priority with respect to the value of the Consigned Products
delivered within the 20-day period.  The Debtors further find
that the payment contemplated by the Settlement Agreement will
not diminish the assets of the estates and is consistent with the
priority of claims under the Bankruptcy Code.

The Debtors further ask the Court to consider their request on
December 5, 2008.  The Debtors said they want to ensure that
sufficient Panasonic merchandise will be available during the
holiday shopping season.  The Debtors believe that delaying the
motion beyond the December 5 hearing could significantly diminish
the value of the Settlement Agreement to the estates and reduce
the Debtors' chances for a successful restructuring.  More
importantly, the Debtors stress that it would constitute an event
of default under the Settlement Agreement should an order of the
Court approving the Settlement Agreement is not entered by
December 10, 2008.

                 About Circuit City Stores, Inc.

Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments: domestic and international.

Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653).  InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.

Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel.  The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as
financial advisors. The Debtors' Canadian general restructuring
counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson
Consultants LLC is the Debtors' claims and voting agent.

The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.

(Circuit City Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


CIRCUIT CITY: Committee Demands Information on 1st Day Orders
-------------------------------------------------------------
The official committee of unsecured creditors formed in Circuit
City Stores, Inc.'s Chapter 11 cases informs the U.S. Bankruptcy
Court for the Eastern District of Virginia that it does not object
to the substantive relief sought in the Debtors' first day motions
to:

  -- pay prepetition claims of certain foreign vendors and
     service providers;

  -- pay prepetition wages, compensation and employee benefits

  -- assume the Agency Agreement among the Debtors, Hilco
     Merchant Resources, LLC, and Gordon Brothers Retail
     Partners, LLC;

  -- pay prepetition sales, use, trust fund and other taxes, and
     related obligations;

  -- pay certain prepetition shipping and delivery charges; and

  -- pay contractors in satisfaction of liens.

The Creditors Committee says it simply wants to secure the right
to obtain information and other data related to the requests at
defined intervals going forward.

To facilitate and enable it to thoroughly review and analyze the
Debtors' operations, financing, liquidity needs and models,
restructuring efforts and prospects for reorganization, the
Creditors Committee says it must be in a position to have a
"free-flow" of information with the Debtors.

While the Debtors and their professionals have expressed a
willingness to cooperate on the proposed flow of information, the
Creditors Committee wants to ensure that the Court's orders
granting the First-Day Motions also provide for the same.

To this end, the Creditors Committee asks the Court to revise
each of the First Day Orders to specifically provide for the
transmittal to the Creditors Committee of all information related
to any of the Debtors' actions taken in conjunction with the
First Day Orders.  The Creditors Committee seeks, among other
things, these specific information:

  -- for the Foreign Vendor Order, weekly reports of credit
     terms agreed with vendors and service providers, their
     names, and any compromises and amounts of disputed claims;

  -- for the Contractor Order, weekly reports listing
     compromises and amounts of disputed claims together with
     the names of any compromising contractors;

  -- for the Shippers Order, weekly reports listing compromises
     and amounts of disputed claims together with the names of
     any compromising shippers; and

  -- for the Wage Order, complete report of amounts paid and
     recipients above the $10,950 priority amount contained in
     Section 507(b) of the Bankruptcy Code.

As the review process is in its infancy stage, the Creditors
Committee reserves the right to seek additional information.

                 About Circuit City Stores, Inc.

Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments: domestic and international.

Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653).  InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.

Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel.  The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as
financial advisors. The Debtors' Canadian general restructuring
counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson
Consultants LLC is the Debtors' claims and voting agent.

The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.

(Circuit City Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


CIRCUIT CITY: Seeks to Employ Mcguirewoods as Ch. 11 Co-Counsel
---------------------------------------------------------------
Circuit City Stores, Inc., and its affiliated debtors authority
from the U.S. Bankruptcy Court for the Eastern District of
Virginia to employ McGuireWoods LLP as their bankruptcy and
restructuring co-counsel, nunc pro tunc to the Petition Date.

The firm will be employed under a general retainer to perform the
legal services that will be necessary during their Chapter 11
cases.

During the fall of 2008, the Debtors engaged McGuireWoods as
restructuring co-counsel, and sought its services with respect
to, among other things, the Debtors' financial restructuring
efforts and preparation for the potential commencement and
prosecution of the cases.

The Debtors believe that McGuireWoods' continued representation
is critical to their efforts to restructure their businesses
because the firm has become intimately familiar with the Debtors'
businesses, legal and financial affairs and practices.  They are
also retaining Skadden, Arps, Slate, Meagher & Flom LLP as
bankruptcy and restructuring co-counsel.  The two firms have
assured the Debtors that they will use their best efforts to
avoid the duplication of services.

As co-counsel, McGuireWoods will, among other things:

  (a) advise the Debtors with respect to their powers and duties
      as debtors and debtors-in-possession in the continued
      management and operation of their business and properties;

  (b) advise and consult on the conduct of the Debtors'
      bankruptcy cases, including all of the legal and
      administrative requirements of operating in Chapter 11;

  (c) attend meetings and negotiate with representatives of
      creditors, Debtors' employees and other parties-in-
      interest;

  (d) advise the Debtors in connection with any contemplated
      sales of assets or business combinations; and

  (e) advise the Debtors in connection with postpetition
      financing and cash collateral arrangements, and negotiate
      and draft related document.

In connection with the prepetition engagement, McGuireWoods
currently holds a retainer of $370,000.  Pursuant to the
engagement, the Retainer will serve as security for the payment
of all unpaid prepetition and postpetition fees and expenses owed
to McGuireWoods by the Debtors.

The Debtors and McGuireWoods contemplate that the Retainer will
be held by McGuireWoods and applied first towards any outstanding
prepetition fees and expenses, and then, towards McGuireWoods'
final billing.

According to McGuireWoods' books and records, (i) from January 1,
through November 9, 2008, McGuireWoods received prepetition
payments from the Debtors totaling $1,654,105, and (ii) from
August 11 through November 9, 2008, McGuireWoods received
prepetition payments totaling $843,375, approximately $370,000 of
which is being held as a retainer for the engagement.
McGuireWoods has filed with the Court a disclosure of
compensation with respect to the retainer on November 19, 2008.

McGuireWoods will be paid based on its standard hourly rates, and
will be reimbursed for expenses and costs:

    Position              Hourly Rate
    --------              -----------
    Partners             $475 to $715
    Counsels             $375 to $450
    Associates           $295 to $450
    Legal assistants     $150 to $255
    Support staff        $150 to $255

Dion W. Hayes, Esq., a partner at McGuireWoods, assures the Court
that his firm is a "disinterested person," as that term is
defined in Section 101(14) of the Bankruptcy Code.

                 About Circuit City Stores, Inc.

Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments: domestic and international.

Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653).  InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.

Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel.  The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc. and Rotschild Inc. as
financial advisors. The Debtors' Canadian general restructuring
counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson
Consultants LLC is the Debtors' claims and voting agent.

The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.

(Circuit City Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


CLAYTON WILLIAMS: S&P Keeps B Sr. Unsec. Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services said that, following an
industry review of oil and gas exploration and production
companies, it revised the outlook to stable from positive on a
number of speculative-grade companies while affirming the ratings.
The review was prompted by S&P's recent revision of its oil and
gas pricing assumptions in light of the rapid decline in
hydrocarbon prices and S&P's expectation that lower prices will
prevail for the near to medium term.

S&P revised the outlook on Forest Oil Corp. (BB-) to stable from
positive because S&P expects worsening credit metrics.  At S&P's
2009 pricing assumptions, S&P expects debt to EBITDA to be roughly
3x, which well exceeds S&P's published upgrade trigger of 2x.  In
addition to the lower pricing assumptions, Forest's debt is higher
than S&P previously expected because the company has not been able
to consummate anticipated asset sales.  Liquidity should remain
adequate in 2009.  S&P expects Forest to lower its capital budget
from the 2008 level to be in line with internally generated cash
flows.

S&P revised the outlook on Whiting Petroleum Corp. (BB-) to stable
from positive.  Although the company has reported significant
production growth throughout 2008, primarily in the Bakken oil
formation in the northern U.S.), positive rating momentum has
stalled because of the lower price environment.  Furthermore,
Whiting is vulnerable to further price declines because of its
minimal hedge position in 2009.  S&P does highlight, though, that
the company's liquidity position of about $400 million as of
Sept. 30, 2008, and its significant covenant cushion are adequate
for the rating.

On Clayton Williams Energy Inc. (B) S&P revised the outlook to
stable from positive because of weaker credit measures, in light
of S&P's revised crude oil and natural gas price assumptions.
Although near-term liquidity remains adequate, the outlook
revision reflects S&P's expectation that Clayton Williams will not
be able to sustain its recent financial performance in the near
term. S&P also expect Clayton's operating cash flows to weaken,
given the company's "unhedged" position in 2009 and a relatively
high cost structure.

The revision of the outlook on Venoco Inc. (B) to stable from
positive stems from falling commodity prices.  This decline
reduces S&P's confidence that credit measures will improve
materially in the near term.  The company is selling or monetizing
(through a volumetric production payment) its interest in the
Hastings complex to Denbury Resources Inc. (BB/Stable/--), which
will likely result in debt repayment and increase availability
under the revolving credit facility.  However, the lower price
environment will probably reduce the proceeds.

                           Ratings List

                 Ratings Affirmed, Outlook Revised

                   Clayton Williams Energy Inc.

                                To              From
                                --              ----
    Corporate credit rating     B/Stable/--     B/Positive/--
     Sr unsecd                  B+              B+
     Recovery                   2               2

                           Forest Oil Corp.

                                To              From
                                --              ----
    Corporate credit rating     BB-/Stable/--   BB-/Positive/--
     Sr unsecd                  B+              B+
     Recovery                   5               5

                            Venoco Inc.

                                To              From
                                --              ----
    Corporate credit rating     B/Stable/--     B/Positive/--
     Sub debt                   B               B
     Recovery                   3               3

                       Whiting Petroleum Corp.

                                To              From
                                --              ----
    Corporate credit rating     BB-/Stable/--   BB-/Positive/--
     Sub debt                   BB-             BB-
     Recovery                   3               3


CNL FUNDING: Moody's Downgrades Ratings on Seven Classes of Notes
-----------------------------------------------------------------
Moody's Investors Service has downgraded six classes of notes
issued by CNL Funding 98-1, LP and 3 classes of notes issued by
CNL Funding 99-1, LP.  The three downgraded notes from the latter
transaction remain on review for possible further downgrade;
additionally, five classes were placed on review for possible
downgrade.  The pools are supported by restaurant franchise loans.

The rating actions are due to deterioration in collateral
performance of the pools and the anticipated erosion of credit
support.  The complete ratings actions are:

CNL Funding 98-1, LP

  -- Class C-1, Downgraded to A3 from A2, previously on 8/18/1998
     Assigned A2

  -- Class C-2, Downgraded to A3 from A2, previously on 8/18/1998
     Assigned A2

  -- Class D-1, Downgraded to Ba2 from Baa1, previously on
     8/12/2008 Placed on review for possible downgrade

  -- Class D-2, Downgraded to Ba1 from Baa1, previously on
     8/12/2008 Placed on review for possible downgrade

  -- Class E-1, Downgraded to B3 from Baa3, previously on
     8/12/2008 Placed on review for possible downgrade

  -- Class E-2, Downgraded to B2 from Baa3, previously on
     8/12/2008 Placed on review for possible downgrade

CNL Funding 99-1, LP

  -- Class A-2, Placed on review for possible downgrade, currently
     Aaa, previously on 11/24/1999 Assigned Aaa

  -- Class B, Placed on review for possible downgrade, currently
     Aa2, previously on 11/24/1999 Assigned Aa2

  -- Class C, Placed on review for possible downgrade, currently
     A2, previously on 11/24/1999 Assigned A2

  -- Class D, Placed on review for possible downgrade, currently
     A3, previously on 11/24/1999 Assigned A3

  -- Class IO, Placed on review for possible downgrade, currently
     Aaa, previously on 11/24/1999 Assigned Aaa

  -- Class E, Downgraded to Ba1 from Baa2, remains on review for
     downgrade, previously on 11/24/1999 Assigned Baa2

  -- Class F, Downgraded to B1 from Ba2, remains on review for
     downgrade, previously on 11/24/1999 Assigned Ba2

  -- Class G, Downgraded to Caa3 from B2, remains on review for
     downgrade, previously on 11/24/1999 Assigned B2

Considerations for the rating actions:

In CNL Funding 98-1, LP, the credit support for the certificates
consists of subordination and overcollateralization of the bonds
by the loans.  The fixed and floating rate certificates are backed
by fixed and floating rate loans; the fixed and floating rate
pools are cross supported with losses allocated to both subpools
in reverse alphabetical order.  Class B through Class H
certificates are subordinated to Class IO and Class A
certificates, providing a total credit support of 89.4% to Class A
certificates.  The subordinated certificates provide credit
support of 70.2% to Class B certificates; 47.1% to Class C
certificates; 31.7% to Class D certificates; and 24% to Class E.
The current overcollateralization amount is zero.

The actions are driven by the recent Chapter 7 bankruptcy filing
of S&A Restaurants Corp., the holding company for Bennigan's and
Steak & Ale restaurants which constitute approximately 27.8%
($19.5MM) of the aggregate pool balance, as of November 2008
distribution date.  These loans, which are fixed rate, have been
transferred to special servicing where most of these properties
are being marketed for sale.  Appraisals obtained by GE reflect
collateral values ranging from $10.4MM (appraised land value for
fee mortgage properties only) to $18.5MM (appraised aggregate
income value for fee and leasehold mortgage properties).  In
addition, future problem loans could be substantial as both fixed
rate and adjustable rate sub-pools have a high percentage of
borrowers with a low Fixed Charge Coverage Ratio.  In the Fixed-
Rate sub-pool 53.4% of the loans by principal balance have a FCCR
less than 1.50 while the Adjustable-Rate sub-pool has nearly 63%
of the loan balance with a FCCR less than 1.25.

The final rating actions are based on the pro-forma credit
enhancement following the liquidation of the Steak & Ale
properties.

In CNL Funding 99-1, LP, the credit support for the certificates
also consists of subordination and overcollateralization of the
bonds by the loans.  Class B through Class H certificates are
subordinated to Class IO and Class A certificates, providing a
total credit support of 39.5% to Class A certificates.  The
subordinated certificates provide credit support of 28.8% to Class
B certificates; 22.4% to Class C certificates; 19.2% to Class D
certificates; 12.7% to Class E; 9.5% to Class F. and 4.2% to Class
G. The current overcollateralization amount is zero.

The actions are driven by the transfer of Valenti Management
loans, which represent 26.6% of the aggregate principal balance,
to special servicing for a covenant default.  In addition, there
has been a decline in the weighted average FCCR for the pool; with
69.2% of the loans by principal balance have an FCCR below 1.20.
The final rating actions are based on the pro-forma credit
enhancement levels.  Additionally Moody's will monitor the
transaction, in part for the Valenti Management loans transfer,
and will be considering expected recoveries during the review
period to help determine the impact of future writedowns on credit
support for the listed rated class.


COLEMAN CABLE: Moody's Affirms Corporate Family Rating at 'B1'
--------------------------------------------------------------
Moody's Investors Service affirmed Coleman Cable, Inc.'s B1
corporate family rating and SGL-2 speculative grade liquidity
rating, but revised its ratings outlook to negative from stable.
The outlook revision reflects Moody's concern over the potential
for a sustained contraction in the company's sales and volumes
given its exposure to weakening end-markets (including automotive,
appliance, and other consumer oriented products).  OEM segment
volumes in lbs. decreased 18% in the September 2008 quarter over
the same period in 2007.

Additionally, although the distribution segment has performed well
year-to-date through September 2008 (largely due to successful
price increases and the volume contribution from acquisitions),
this business experienced increasing signs of weakness at the end
of the quarter as customers seek to reduce their inventory levels
in the wake of uncertain demand and deflating copper prices.

Notwithstanding these concerns, the affirmation of the B1 rating
incorporates Moody's view that Coleman's credit metrics are still
appropriate for the ratings category as well as its good liquidity
position and continued emphasis on debt reduction.

These ratings were affirmed:

  -- Corporate family rating at B1;

  -- Probability-of-default rating at B1;

  -- Speculative grade liquidity rating at SGL-2;

  -- $240 million 9.875% senior unsecured notes due 2012 at B2
     (LGD5, 75%).

The last rating action was on March 21, 2007, when Moody's
upgraded Coleman's corporate family rating to B1 from B2 and
assigned a stable ratings outlook.  This action completed a
ratings review for possible upgrade that was initiated on March
12, 2007.

Headquartered in Waukegan, Illinois, Coleman Cable, Inc. is a
leading designer, developer, manufacturer and supplier of
electrical wire and cable products for consumer, commercial and
industrial applications, with operations primarily in the United
States.  Coleman reported sales of $1.1 billion through the twelve
months ended September 30, 2008.


COMFORT CO: Files Joint Chapter 11 Plan and Disclosure Statement
----------------------------------------------------------------
Comfort Co. Inc. and its debtor-affiliates delivered on Nov. 26,
2008, to the Honorable Mary F. Walrath of the United States
Bankruptcy Court for the District of Delaware a joint Chapter 11
plan of reorganization and a disclosure statement explaining the
plan.

The Debtors said the on-time filing of its plan is a major step
toward their emergence from Chapter 11 in the middle of the first
quarter of 2009.  The Debtors further said they expect to emerge
from Chapter 11 without utilizing all of the debtor-in-possession
financing made available to them for operations during this time.

In addition, the Debtors noted that strong, long-standing
relationships with suppliers and customers, as well as the support
of their lenders, are helping them stay on -- or ahead of -- their
chapter 11 plan.

The Debtors further said that founder Michael Fux will resume his
role as chief executive officer upon their emergence from Chapter
11.  Mr. Fux will become a part owner of the Debtors and also
provide additional liquidity as they emerge from Chapter 11.

The Debtors propose a Feb. 4, 2008 hearing to consider
confirmation of the plan.

                      Overview of the Plan

The plan contemplates payment in full in cash to holders of
allowed administrative claims, priority tax claims, DIP claims,
other priority claims, and other secured claims.  The plan further
contemplates the distribution of:

    i) term notes and shares representing an aggregate of at least
       75% of the issued new equity to holders of allowed first
       lien secured claims;

   ii) shares representing an aggregate of 6.8% of the issued
       new equity and 68% of the net proceeds of all recoveries on
       avoidance actions to holders of first lien deficiency
       claims;

  iii) shares representing an aggregate of 6.8% of the issued new
       equity and 68% of the net proceeds of all recoveries on
       avoidance actions to holders of second lien claims; and

   iv) shares representing an aggregate of 0.9% of the issued new
       equity and 9% of the net proceeds of all recoveries on
       avoidance actions to holders of allowed general unsecured
       claims other than first lien deficiency claims and second
       lien claims;

In addition, the plan will allow holders of intercompany claims
and intercompany equity interest or claims.  Holders of existing
equity interests will not receive any distribution under the plan.

The Debtors need to obtain exit financing in order to finance
distributions as set for in the Plan and to fund their operations.
The Debtors will secure commitments for exit financing in amounts
sufficient to fund the payments required under the plan and to
operate their businesses going forward.

The plan classifies interests against and liens in the Debtors in
nine groups.  The classification of treatment of interests and
claims are:

                 Treatment of Interests and Claims

                   Type                           Estimated
         Class     of claims         Treatment    Recovery
         -----     ---------         ---------    ---------
         N/A       administrative    unimpaired   100%

         N/A       priority tax      unimpaired   100%

         N/A       DIP claims        unimpaired   100%

         1         other priority    unimpaired   100%

         2         first lien        unimpaired
                   secured

         3         other secured     unimpaired

         4         first lien        impaired
                   deficiency

         5         second lien       impaired

         6         general unsecured impaired

         7         intercompany      unimpaired   100%

         8         intercompany      unimpaired   100%
                   equity interests

         9         existing equity   impaired     0%

Each holder of a claim in Class 2, 4, 5, or 6 will be entitled to
vote for the plan.

Holders of Class 1 other priority claims are entitled to priority
pursuant to Section 507(a) of the Bankruptcy Code -- other than
administrative claims and priority Tax Claims.  Claims may
include:

   -- unsecured Claims for accrued employee compensation earned
      within 180 days prior to commencement of these Chapter 11
      Cases to the extent of $10,950 per employee; and

   -- contributions to employee benefit plans arising from
      services rendered within 180 days prior to the commencement
      of these Chapter 11 Cases, but only for each such plan to
      the extent of (i) the number of employees covered by such
      plan multiplied by $10,950, less (ii) the aggregate amount
      paid to such employees as a priority for wages, salaries or
      commissions, plus the aggregate amount paid on behalf of
      such employees to other benefit plans.

Each holder of Class 2 first lien secured claims will be deemed
fully secured and allowed in the aggregate amount of $125 million.
On the effective date, the reorganized debtors will:

   a) execute and deliver to the First Lien Agent, on behalf of
      holders of First Lien Secured Claims, the Restructured Term
      Loan Agreement, and pursuant thereto issue to the holders of
      First Lien Secured Claims term notes in the aggregate
      original principal amount of $100 million, with the these
      general terms:

      -- secured by a Lien on substantially all of the Reorganized
         Debtors' assets and property, junior to the Lien securing
         the Exit Facility;

      -- interest will be payable in kind at LIBOR plus 8.0%,
         except that interest shall be payable in Cash at the rate
         of 1% per annum, in either case on a quarterly basis:
         provided, however, that all interest shall be paid in
         Cash at LIBOR plus 6.0% upon satisfaction of certain
         financial metrics to be set forth in the Restructured
         Term Loan Agreement;

      -- the maturity date of the Restructured Term Loan Agreement
         will be paid on the six year anniversary of the
         Effective Date;

      -- Until the earlier of the third anniversary of the
         Effective Date, and the date on which all interest on the
         term notes will be payable in Cash, the transfer by a
         holder of any term notes under the Restructured Term Loan
         Agreement must be accompanied by the transfer to the same
         transferee of a like percentage of the shares of Issued
         New Equity then held by such holder; and

      -- the obligations under the Restructured Term Loan
         Agreement will be guaranteed by the Guarantors; and

   b) issue to the First Lien Agent, on behalf of the holders of
      First Lien Secured Claims, shares representing an aggregate
      of at least 75% of the Issued New Equity.

Holders of Class 4 first lien deficiency claims will be deemed
allowed general unsecured Claims in the aggregate amount of
$155,693,443.  On the effective date, the holder will receive the,
on a pro rata basis:

   a) shares representing an aggregate of 6.8% of the Issued New
      Equity; and

   b) 68% of the net proceeds of all recoveries on Avoidance
      Actions.

Holders of Class 5 second lien claims will be deemed allowed
general unsecured claims in the aggregate amount of $52,208,998.
On the Effective Date, holder will receive, on a Pro Rata basis:

   a) shares representing an aggregate of 2.3 % of the Issued New
      Equity; and

   b) 23% of the net proceeds of all recoveries on Avoidance
      Actions.

After the plan's initial distribution date, holders of Class 6 of
general unsecured claims will receive its pro rata share of:

   a) shares representing an aggregate of 0.9% of the Issued New
      Equity; and

   b) 9% of the net proceeds of all recoveries on Avoidance
      Actions.

All intercompany claims will remain outstanding and will not be
discharged by the Plan but will be liquidated while intercompany
equity interests will be reinstated and holders will retain their
intercompany equity interests.

Existing Equity Interests will be cancelled and deemed worthless
as of the plan's effective date.

A full-text copy of Comfort Co.'s Joint Chapter 11 Plan of
Reorganization is available for free at:

               http://ResearchArchives.com/t/s?363c

A full-text copy of Comfort Co.'s Disclosure Statement is
available for free at:

               http://ResearchArchives.com/t/s?363d

                        About Comfort Co.

Comfort West Long Branch, New Jersey-based Co., Inc. --
http://www.sleepinnovations.com/-- makes and sells foam bedding,
sleep products and accessories.  The company and its affiliates
filed for Chapter 11 protection on Oct. 3, 2008 (Bankr. D.
Delaware Case No. 08-12305).  Michael R. Lastowski, Esq., at Duane
Morris LLP assists the company in its restructuring effort.  The
U.S. Trustee for Region appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Lowenstein Sandler PC
and Connolly Bove Lodge & Hutz LLP represent the Committee in
these cases.  The company listed assets of $100 million to
$500 million and debts of $100 million to $500 million.


CORPORACION DURANGO: U.S. Court Cedes to Mexico Main Proceeding
---------------------------------------------------------------
Corporacion Durango SAB, has won recognition from the U.S.
Bankruptcy Court for the Southern District of New York that the
Mexico court won recognition of a Mexico court as home to the
foreign main proceeding for the company's restructuring.

According to Bloomberg News' Bill Rochelle, the order signed by
the U.S. Bankruptcy Court contained an exception to the otherwise
broad prohibition against all creditor actions in the United
States.  As a compromise with senior noteholders, the bankruptcy
judge allowed suits in any court so the noteholders may challenge
efforts by the company to cancel the notes.

As reported by the Troubled Company Reporter on Oct. 14,
Corporacion Durango won from the Bankruptcy a temporary
restraining order from lawsuits against it after it filed a
Chapter 15 petition on Oct. 6, 2008.

Chapter 15 allows a U.S. Bankruptcy Judge to aid a bankruptcy
pending in another country.  Durango simultaneously commenced a
bankruptcy reorganization in a The First Federal District Court in
Durango began simultaneous proceedings to protect the Corporacion
Durango's creditors in Mexico.

On October 6, 2008, two U.S.-based subsidiaries of Corporacion
Durango filed for Chapter 11 -- Paper International, Inc., and
Fiber Management of Texas, Inc. in the U.S. Bankruptcy Court.
See: http://www.internationalpaper.com

                     About Corporacion Durango

Durango, Mexico-based Corporacion Durango S.A.B. de C.V. produces
brown paper and packaging products.  Its packaging division,
Empresas Titan, manufactures corrugated packaging in Mexico.  It
also produces newsprint through Grupo Pipsamex.

After The First Federal District Court in Durango approved its
plan of reorganization and declared the termination of its
"Concurso Mercantil" proceeding, the Company filed for Chapter 15
bankruptcy (Bankr. S.D. N.Y. Case No. 08-13911) on Oct. 6, 2008.
Two affiliates filed for Chapter 11 bankruptcy protection
separately on the same day.

John K. Cunningham, Esq., at White & Case, LLP, represents the
Debtors in their restructuring efforts.  In its filing, the Lead
Debtor listed estimated assets of more than US$1 billion and
estimated debts of more than US$1 billion.


CULP INC: Receives Notice of Listing Non-Compliance from Nasdaq
---------------------------------------------------------------
The New York Stock Exchange provided formal notice regarding Culp,
Inc.'s non-compliance with the NYSE's continued listing standards.
NYSE said that for more than 30 consecutive trading days, the
company's average market capitalization was less than $75 million
($32.8 million as of Dec. 11, 2008), and its reported
shareholders' equity was below $75 million ($46.5 million as of
Nov. 2, 2008.

Under applicable NYSE procedures, unless the NYSE determines
otherwise, the company has 45 days from the date of its receipt of
the notice to submit a plan to the NYSE to demonstrate its ability
to achieve compliance with the continued listing standards within
18 months.  The company intends to submit a plan to demonstrate
compliance with the listing standards within the required time
frame.  If the plan is accepted, the NYSE will monitor the company
on a quarterly basis and can deem the plan period over prior to
the end of the 18 months if a company is able to demonstrate
returning to compliance with the applicable continued listing
standards, or achieving the ability to qualify under an original
listing standard, for a period of two consecutive quarters.
Regardless of this plan, if the company's average market
capitalization over a 30 trading-day period falls below $25
million, the NYSE is expected to start immediate delisting
procedures.  Beginning on or about Dec. 18, 2008, the NYSE will
make available on its consolidated tape an indicator, "BC," to
indicate that the company is below the NYSE's quantitative listing
standards.  The indicator will be removed at such time as the
company is deemed compliant with the NYSE's continued listing
standards.

                         About Culp, Inc.

Headquartered in High Point, North Carolina, Culp, Inc. (NYSE:CFI)
-- http://www.culpinc.com/-- markets mattress fabrics for bedding
and upholstery fabrics for furniture.  The company's fabrics are
used principally in the production of bedding products and
residential and commercial upholstered furniture.


CYBERSURF CORP: Didn't File Annual Report, Gets Cease Trade Order
-----------------------------------------------------------------
Cybersurf Corp. was unable to file its audited financial
statements and other material for the fiscal year ended June 30,
2008 by the Oct. 28, 2008, deadline set forth in National
Instrument 51-102-Continuous Disclosure Obligations.

A Management Cease Trade Order was issued by the Alberta
Securities Commission on Nov. 5, 2008.  This Default Status Report
is issued pursuant to National Policy 12-203 Cease Trade Orders
for Continuous Disclosure Defaults.

The company continues to implement its remediation plan as
outlined in its Notice of Default filed on Oct. 5, 2008, and
amended on Nov. 5, 2008.

The company has not yet made a decision on hiring a new auditor or
engaging its existing auditor.  It has met with a number of
potential replacement auditors and has narrowed it choice down to
two potential replacement auditor firms.  It has received audit
proposals and is currently reviewing them.  It said expects to
make a decision by Dec. 16, 2008.

The company continues to expect to file its financial statements
by Dec. 27, 2008.  The company intends to continue to satisfy the
provisions of the Alternative Information Guidelines by issuing
bi-weekly Default Status Reports in the form of news releases, so
long as it remains in default.

According to the Company, its not in any insolvency proceedings at
the present time and there is no other material information
relating to its affairs that has not been generally disclosed.

                          About Cybersurf

Headquartered in Calgary, Canda, Cybersurf Corp. (TSX VENTURE:CY)
-- http://www.cybersurf.com,and http://www.cybersurf.net--
provides Internet and communications services in the United States
and Canada


DELTA FINANCIAL: Delaware Court Confirms Second Amended Plan
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
confirmed Delta Financial Corp.'s Second Amended Joint Chapter 11
Plan of Liquidation.

Bankruptcy Law360 reports that the Plan was confirmed at a hearing
on Dec. 8.  According to an attorney for the Debtors, Bankruptcy
Law360 continues, the Plan is currently awaiting the Court's
approval of a final order.

Bankruptcy Data says the Plan transfers the Debtors' assets and
liabilities to a liquidating trust, which will be administered by
a liquidating trustee.  Bankruptcy Data says the liquidating
trustee will liquidate the Debtors' remaining assets; evaluate,
pursue or settle potential causes of action, as appropriate;
review the universe of claims in the Chapter 11 cases; fix the
allowed amount of those claims and then distribute the proceeds
from the assets to the creditors in a manner consistent with the
priority scheme in the Bankruptcy code.  Once the liquidating
trustee liquidates all assets, fixes all claims and conveys all
distributions to creditors, the liquidating trustee will dissolve
the liquidating trust pursuant to the terms of the Plan,
Bankruptcy Data says.

On November 26, 2008, Delta Financial filed a form NTN 10-Q with
the Securities and Exchange Commission, advising that it was
unable to meet the deadline to file its Quarterly Report on Form
10-Q for the quarter ended September 30, 2008.

"Due to the demands associated with the bankruptcy filing and
related activities, and the [company's] limited personnel and
resources, the [company] has been unable to complete the
preparation of the Form 10-Q," the filing said.  Delta Financial
also noted that the employment of its Chief Financial Officer was
terminated in April 2008.

Delta Financial also has not filed its financial report on Form
10-K for the year ended December 31, 2007 and Form 10-Q's for the
quarters ended March 31, 2008 and June 30, 2008.

The company said it has been unable to provide a reasonable
estimate of its third quarter 2008 results of operations due to
its focus on its ongoing bankruptcy proceedings.  The company said
it cannot estimate what significant changes will be reflected in
its third quarter 2008 results of operations compared to its third
quarter 2007 results of operations.  The company noted that its
2007 results of operations were prepared on the basis of the
assumption that the company and its consolidated subsidiaries
would continue to operate as a going concern, which was not
necessarily the case as of September 30, 2008, in light of the of
the bankruptcy proceedings.

Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) --
http://www.deltafinancial.com/-- is a Woodbury, New York-based
specialty consumer finance company that originates, securitizes
and sells non-conforming mortgage loans.

The company filed a chapter 11 petition on December 17, 2007
(Bankr. D. Del. Lead Case No. 07-11880).  On the same day, three
affiliates filed separate chapter 11 petitions -- Delta Funding
Corp., Renaissance Mortgage Acceptance Corp., and Renaissance
R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to
07-11883).

The Debtors selected Morrison & Foerster LLP as their general
bankruptcy counsel and David B. Stratton, Esq. and James C.
Carignan, Esq. at Pepper Hamilton LLP as their counsel.  The
Debtors hired AlixPartners LLP as their claims agent.  The
Official Committee of Unsecured Creditors retained Landis Rath &
Cobb LLP as its Delaware counsel.

The Debtors' amended consolidated quarterly financial condition as
of Sept. 30, 2007, showed $7,223,528,000 in total assets and
$7,108,232,000 in total liabilities.  The Debtors' petition listed
D.B. Structured Products Inc. as their largest unsecured creditor
holding a $19,500,000 claim.


DP FOODS: Files for Ch. 11 to Halt Burger King from Dropping Deals
------------------------------------------------------------------
According to Bloomberg News' Bill Rochelle, DP Foods Inc. filed
for Chapter 11 in Santa Ana, California to stay Burger King from
terminating their franchise agreements.

Pursuant to Section 362 of the U.S. Bankruptcy Code, the filing of
a bankruptcy case, under any chapter of the Bankruptcy Code,
triggers an injunction against the continuance of any action by
any creditor against the debtor or the debtor's property.

Including affiliates not in bankruptcy, the chain has 110 Burger
King restaurants in California, Washington and Oregon.  The
companies own the properties where 60 of the restaurants operate.

DP Foods Inc. operates 26 fast-food Burger King Fastfood
restaurants.  It filed for Chapter 11 (Bankr. C.D. Calif.) on Dec.
9, 2008.


DR HORTON: Fitch Downgrades Issuer Default Rating to 'BB'
---------------------------------------------------------
Fitch Ratings has downgraded D.R. Horton, Inc.'s Issuer Default
Rating and outstanding debt ratings:

  -- IDR to 'BB' from 'BB+';
  -- Senior unsecured to 'BB' from 'BB+';
  -- Unsecured bank credit facility to 'BB' from 'BB+';
  -- Senior subordinated debt to 'B+' from 'BB-'.

The Rating Outlook remains Negative.

The downgrade reflects the current very difficult housing
environment and Fitch's expectations that housing activity will be
even more challenging than previously anticipated throughout
calendar 2009.  The recessionary economy and impaired mortgage
markets are, of course, contributing to the housing shortfall.
The ratings changes also reflect negative trends in DHI's
operating margins, further deterioration in credit metrics
(especially interest coverage and debt/EBITDA ratios), erosion in
tangible net worth from non-cash real estate charges and operating
losses, which have led to untypically high leverage.  (On a net
debt basis, DHI's leverage is still within management's targeted
range of below 45%.)  Absent further significant non-cash real
estate charges, DHI's leverage could also be lower in the next few
quarters as the company pays down upcoming debt maturities.
Furthermore, DHI's liquidity position provides a buffer and
supports the new ratings.  Fitch notes there is potential for
lower operating cash flow generation in Fiscal 2009 as compared to
fiscal 2008.

Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as land
and development spending, general inventory levels, speculative
inventory activity (including the impact of high cancellation
rates on such activity), gross and net new order activity, debt
levels and free cash flow trends and uses.

DHI's ratings are based on the company's execution of its business
model in the current housing correction, steady capital structure,
geographic and product line diversity, and the company's above
average growth during this past housing expansion.  DHI had been
an active consolidator in the homebuilding industry, which had
kept debt levels a bit higher than its peers.  But management also
exhibited an ability to quickly and successfully integrate its
many acquisitions.  During fiscal 2002 DHI completed its largest
acquisition in absolute size (Schuler Homes).  However, DHI made
no acquisitions in fiscal 2003 through fiscal 2008.  It also
appears that DHI may be less acquisitive in the future as it
primarily focuses on harvesting the opportunities within its
current and adjacent markets.

DHI maintains a 4.7-year supply of lots (based on last 12 months
deliveries), 79.2% of which are owned and the balance controlled
through options.  (The options share of total lots controlled is
down sharply over the past three years as the company has written
off substantial numbers of options.)

The ratings also manifest the DHI's historic aggressive, yet
controlled growth strategy and its relatively heavy speculative
building activity (which had lessened late in the last up-cycle).
DHI has historically built a significant number of its homes on a
speculative basis (i.e. begun construction before an order was in
hand).  DHI successfully executed this strategy in the past.
Nevertheless, Fitch was more comfortable with the more modest
'spec' targets of 2004 and 2005.  At present 'spec' counts are
high for DHI as with certain other builders because of higher than
normal cancellation rates and market conditions that favor 'spec'
building.

DHI ended the Sept. 2008 quarter with $1.39 billion of cash on the
balance sheet and $52.8 million of availability under its
$1.65 billion unsecured revolving credit facility.  Additionally,
DHI expects to receive a tax refund of approximately $622 million
in December 2008.  In June 2008, DHI amended its revolving credit
facility.  As part of the amendment, the commitments under the
revolver were reduced from $2.25 billion to $1.65 billion and the
tangible net worth covenant was reset to $2 billion.  As of Sept.
30, 2008, DHI was in compliance with all the covenants under its
revolving credit facility.  At Sept. 30, 2008, the company had a
cushion of $631 million under the TNW covenant.  The credit
facility also has a maximum leverage covenant of 55%. DHI's
leverage (for purposes of this covenant) at Sept. 30, 2008 was
49.6%.  Management indicated that it has started preliminary
discussions with its lead banks regarding the covenants under its
credit facility.  The revolving credit facility matures in
December 2011.


EASTMAN KODAK: Moody's Reviews Low-B Ratings for Likely Downgrade
-----------------------------------------------------------------
Moody's Investors Service placed Eastman Kodak Company's ratings
under review for possible downgrade.  The rating action reflects
Kodak's effective negative preannouncement whereby the company
withdrew its guidance for the fourth quarter, citing the weak
demand environment across its product portfolio.

The company's most recent pre-announcement follows an earlier
downward revision of revenue and profitability following its third
quarter results.  As a result of the deteriorating demand
environment, Kodak's consumer digital segment, (about 30% of total
revenue) is likely to see revenue declines in the fourth quarter,
a period in which revenue typically shows seasonal strength.
Combined with aggressive pricing pressure throughout its
portfolio, Moody's expects that this segment will lose money in
the fourth quarter.  Given normal seasonality that will be
exacerbated by the economic environment, Moody's expects that
losses in this segment would likely occur in the first part of
2009.

Driven by the stress in the credit markets and reduced demand by
commercial printers, Kodak's commercial customers have found it
more difficult to secure financing for new equipment purchases.
This is expected to pressure results in the company's graphics
communications business, which accounts for approximately 36% of
total revenue.

Kodak's traditional film business, which includes consumer film
and photofinishing as well as feature film imaging, accounts for
about 33% of revenue and is expected to remain profitable.  The
segment generated $157 million of operating profit in the first
nine months of 2008.  However, as this legacy business continues
its secular decline, this segment's reduced profit contribution
will place increasing pressure on its other businesses -- the
intensely competitive consumer digital sector and the currently
challenged graphics communications business.

As part of its pre-announcement, the company said that its
executives will not get salary increases in 2009 and that its
401(k) match for eligible employees is being temporarily
suspended.  In addition to these plans, the review will focus on
what Moody's expects will be a more comprehensive plan by Kodak to
contend with an extended slowdown in consumer and commercial
spending.

The company currently maintains good financial flexibility, with
cash balances of $1.8 billion as of September 30, 2008, and access
to a largely undrawn $1 billion secured revolving credit facility
with ample headroom under its two financial covenants.
Concurrently, Moody's affirmed the company's speculative grade
liquidity rating of SGL-2.  While Kodak has modest debt maturities
of about $40 million over each of the next four years, the company
also has an out of the money 3.375%, $575 million convertible bond
that has a put date in October 2010.  Moody's review will also
consider the company's plans to address this potential put.

Ratings under review for downgrade include:

  -- B1 Corporate Family Rating;

  -- B1 Probability of default rating;

  -- $1 billion 5 Year Secured Revolving Credit Facility, Ba1,
     LGD2, 18%;

  -- $500 million Senior Unsecured Notes due 2013, B2 LGD4, 68%;

  -- $3 million Senior Unsecured Notes due 2018, B2 LGD4, 68%;

  -- $10 million Senior Unsecured Notes due 2021, B2 LGD4, 68%;

  -- $575 million Senior Unsecured Convertible Notes due 2033, B2
     LGD4, 68%

Moody's most recent rating action for Kodak was on June 24, 2008
when Moody's commented that Kodak's B1 corporate family rating
with a stable outlook would not be affected by the company's
announcement that its Board of Directors has authorized a
$1.0 billion stock repurchase program which the company planned to
fund from a $581 million tax refund from the Internal Revenue
Service associated with a completed audit of certain claims filed
for tax years for the tax years 1993-1998.

Eastman Kodak Company, headquartered in Rochester, New York,
provides imaging technology products and services to the
photographic, graphic arts commercial printing, consumer digital,
and entertainment imaging market.  Kodak reported $10.2 billion in
revenue for the twelve months ended September 30, 2008.


ECLIPSE AVIATION: Committee Objects to Sale to Insider
------------------------------------------------------
The official committee of unsecured creditors in Eclipse Aviation
Corp.'s Chapter 11 cases objects to an accelerated sale of the
business to ETIRC Aviation Sarl, the owner of 65% of the stock of
Eclipse.

According to Bloomberg News' Bill Rochelle, the Creditors
Committee opposes the Jan. 6 deadline for bids, as the company did
not solicit bids prior to the petition date. The committee also
complains that the sale is to an insider and the amount being paid
is "nearly impossible to value." The Committee requests:

   -- three more weeks for marketing of the business;

   -- valuation of ETIRC's bid so others can structure competing
      bids;

   -- deny a $5 million breakup fee for ETIRC which will hamper
      competitive bidding; and

   -- to deny the assignment to ETIRC of Eclipse rights to pursue
      causes of action.

                 About Eclipse Aviation

Albuquerque, New Mexico-based Eclipse Aviation Corporation --
http://www.eclipseaviation.com/-- makes six-passenger planes
powered by two Pratt & Whitney turbofan engines.  The company
filed for Chapter 11 protection on Nov. 25, 2008 (Bankr. D.
Delaware Case No. 08-13031).  The company listed assets of
$100 million to $500 million and debts of more than $1 billion.


FEDERAL-MOGUL: Indian Government Okays $15MM Investment
-------------------------------------------------------
India's Finance Minister Shri P. Chidambaram approved 32 proposals
of foreign direct investment amounting to approximately
$172,800,000, including Federal Mogul Corp.'s proposed investment
of $15,300,000 for an autoparts plant in Chennai, India, the
Indian Government said in a November 26, 2008, press release.

Federal Mogul plans to build a new facility in Chennai, India,
for the manufacture of friction components for Original Equipment
and Aftermarket segments.  The operation is scheduled to begin
production of light vehicle brake and friction components,
commercial vehicle and railway friction products by September
2009.

A copy of the Indian Ministry's press release is available for
free at http://bankrupt.com/misc/India_PR_ApprovingInvestment.pdf

                About Federal-Mogul Corporation

Federal-Mogul Corporation -- http://www.federal-mogul.com/--
(OTCBB: FDMLQ) is a global supplier, serving the world's foremost
original equipment manufacturers of automotive, light commercial,
heavy-duty, agricultural, marine, rail, off-road and industrial
vehicles, as well as the worldwide aftermarket.  Founded in
Detroit in 1899, the company is headquartered in Southfield,
Michigan, and employs 45,000 people in 35 countries.  Aside from
the U.S., Federal-Mogul also has operations in other locations
which includes, among others, Mexico, Malaysia, Australia, China,
India, Japan, Korea, and Thailand.

The Company filed for chapter 11 protection on Oct. 1, 2001
(Bankr. Del. Case No. 01-10582).  Lawrence J. Nyhan Esq., James F.
Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $10.15 billion in assets and $8.86 billion in liabilities.
Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at
Dudley Hill, Bradford.  Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer,
Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the
Official Committee of Unsecured Creditors.

On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003.  They submitted several amendments and on June 6,
2004, the Bankruptcy Court approved the Third Amended Disclosure
Statement for their Third Amended Plan.  On July 28, 2004, the
District Court approved the Disclosure Statement.  The estimation
hearing began on June 14, 2005.  The Debtors submitted a Fourth
Amended Plan and Disclosure Statement on Nov. 21, 2006, and the
Bankruptcy Court approved that Disclosure Statement on Feb. 6,
2007.  The Fourth Amended Plan was confirmed by the Bankruptcy
Court on Nov. 8, 2007, and affirmed by the District Court on
November 14.  Federal-Mogul emerged from chapter 11 on Dec. 27,
2007.

(Federal-Mogul Bankruptcy News, Issue No. 176; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)

                            *    *    *

As reported by the Troubled Company Reporter on Nov. 4, 2008,
Standard & Poor's Ratings Services said it has revised its outlook
on Federal-Mogul Corp. to negative from stable and affirmed its
'BB-' corporate credit rating on the company.  Southfield,
Michigan-based Federal-Mogul had total balance sheet debt of
$3 billion as of Sept. 30, 2008.


FIRST DATA: Posts $547MM Net Loss in Nine Months ended Sept. 30
---------------------------------------------------------------
First Data Corporation disclosed in a filing with the Securities
and Exchange Commission that for three months ended Sept. 30,
2008, it has incurred a net loss of $164.4 million compared to a
net loss of $56.7 million for the same period in the previous
year.

For nine months ended Sept. 30, 2008, the company reported a net
loss of $546.7 million compared to a net loss of $460.8 million
for the same period in the previous year.

The company's source of liquidity during the first nine months of
2008 was principally cash generated from operating activities.
The company believes its current level of cash and short-term
financing capabilities along with future cash flows from
operations are sufficient to meet the needs of its existing
businesses.  At Sept. 30, 2008, and Dec. 31, 2007, the company
held $578.9 million and $606.5 million in cash and cash
equivalents.  Cash and cash equivalents held outside of the United
States at Sept. 30, 2008, and Dec. 31, 2007, were $170.9 million
and $203.4 million.

The company is in compliance with all applicable covenants as of
Sept. 30, 2008.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $44.0 billion, total liabilities of $37.6 billion and
stockholders' equity of $6.4 billion.

A full-text copy of the 10-q filing is available for free at
http://ResearchArchives.com/t/s?3626

                         About First Data

Based in Greenwood Village, Colorado, First Data Corporation --
http://www.firstdata.com/-- is a global leader in electronic
commerce and payment solutions for financial institutions,
merchants, and other organizations worldwide.  The company
processes transaction data of all kinds, harnesses the power of
that data and delivers innovations in secure infrastructure,
intelligence and insight for its customers. With operations in 37
countries, First Data serves over 5.4 million merchant locations,
2,000 card issuers and their customers.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 21, 2008,
Fitch Ratings has assigned these ratings: (i) $3 billion 10.55%
senior unsecured notes with four-year mandatory PIK interest due
2015 'B-/RR6'; and (ii) $2.5 billion 11.25% senior subordinated
notes due 2016 'CCC+/RR6'.  The rating outlook has been revised to
negative from stable.


FOREST OIL: S&P Keeps B+ Sr. Unsec. Rating; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that, following an
industry review of oil and gas exploration and production
companies, it revised the outlook to stable from positive on a
number of speculative-grade companies while affirming the ratings.
The review was prompted by S&P's recent revision of its oil and
gas pricing assumptions in light of the rapid decline in
hydrocarbon prices and S&P's expectation that lower prices will
prevail for the near to medium term.

S&P revised the outlook on Forest Oil Corp. (BB-) to stable from
positive because S&P expects worsening credit metrics.  At S&P's
2009 pricing assumptions, S&P expects debt to EBITDA to be roughly
3x, which well exceeds S&P's published upgrade trigger of 2x.  In
addition to the lower pricing assumptions, Forest's debt is higher
than S&P previously expected because the company has not been able
to consummate anticipated asset sales.  Liquidity should remain
adequate in 2009.  S&P expects Forest to lower its capital budget
from the 2008 level to be in line with internally generated cash
flows.

S&P revised the outlook on Whiting Petroleum Corp. (BB-) to stable
from positive.  Although the company has reported significant
production growth throughout 2008, primarily in the Bakken oil
formation in the northern U.S.), positive rating momentum has
stalled because of the lower price environment.  Furthermore,
Whiting is vulnerable to further price declines because of its
minimal hedge position in 2009.  S&P does highlight, though, that
the company's liquidity position of about $400 million as of
Sept. 30, 2008, and its significant covenant cushion are adequate
for the rating.

On Clayton Williams Energy Inc. (B) S&P revised the outlook to
stable from positive because of weaker credit measures, in light
of S&P's revised crude oil and natural gas price assumptions.
Although near-term liquidity remains adequate, the outlook
revision reflects S&P's expectation that Clayton Williams will not
be able to sustain its recent financial performance in the near
term. S&P also expect Clayton's operating cash flows to weaken,
given the company's "unhedged" position in 2009 and a relatively
high cost structure.

The revision of the outlook on Venoco Inc. (B) to stable from
positive stems from falling commodity prices.  This decline
reduces S&P's confidence that credit measures will improve
materially in the near term.  The company is selling or monetizing
(through a volumetric production payment) its interest in the
Hastings complex to Denbury Resources Inc. (BB/Stable/--), which
will likely result in debt repayment and increase availability
under the revolving credit facility.  However, the lower price
environment will probably reduce the proceeds.

                           Ratings List

                 Ratings Affirmed, Outlook Revised

                   Clayton Williams Energy Inc.

                                To              From
                                --              ----
    Corporate credit rating     B/Stable/--     B/Positive/--
     Sr unsecd                  B+              B+
     Recovery                   2               2

                           Forest Oil Corp.

                                To              From
                                --              ----
    Corporate credit rating     BB-/Stable/--   BB-/Positive/--
     Sr unsecd                  B+              B+
     Recovery                   5               5

                            Venoco Inc.

                                To              From
                                --              ----
    Corporate credit rating     B/Stable/--     B/Positive/--
     Sub debt                   B               B
     Recovery                   3               3

                       Whiting Petroleum Corp.

                                To              From
                                --              ----
    Corporate credit rating     BB-/Stable/--   BB-/Positive/--
     Sub debt                   BB-             BB-
     Recovery                   3               3


GENERAL GROWTH: Bankruptcy Will Have Little Effect on CMBS Deals
----------------------------------------------------------------
Material rating actions on Fitch-rated U.S. CMBS transactions with
significant exposure to General Growth Properties assets are
unlikely if GGP files for bankruptcy, according to Fitch Ratings,
which recently downgraded General Growth Properties' Issuer
Default Rating to 'C' earlier this week, indicating that a default
is imminent.

"The likelihood for significant rating actions across transactions
with GGP property exposure is slim given their strong performance,
moderate leverage, and the bankruptcy remote nature of CMBS
borrowers," according to Managing Director Susan Merrick,
"However, longer term declines in property performance are
possible if necessary capital used for property maintenance and
renovation is limited and property management operations
are affected by corporate financial stress."

Therefore, Fitch will continue to monitor these transactions
closely.

GGP has made significant use of leverage to fund growth,
particularly secured debt, which has resulted in substantially all
of its assets being encumbered.  GGP-sponsored loans are included
in 64 CMBS transactions rated by Fitch accounting for
approximately 1.4% of the total Fitch rated universe.

Given the current liquidity stress in the CMBS market, GGP has
had considerable difficulty recently in accessing the secured debt
markets.  GGP has almost $1 billion of secured and unsecured debt
maturing by the end of 2008 and an additional $3.1 billion
maturing in 2009.

In the event of a GGP corporate bankruptcy, CMBS bondholders are
protected by the bankruptcy-remote nature of CMBS borrowers.  "A
default on GGP corporate loans will not trigger a default under
CMBS loan documents," said Mr. Merrick.  The borrowing entities
are typically structured as single purpose entities (SPEs), which
isolate the borrower from the bankruptcy of a parent or related
entity.  This is achieved by limiting the SPEs' role to owning and
maintaining the property and restricting it from owning other
assets or incurring any additional debt. Bondholders are further
protected by the master servicer's ability to advance principal
and interest payments if they are deemed recoverable, should debt
service payments not be made.

"A key factor limiting term default risk of CMBS loans in the
event of a GGP bankruptcy is the strength of the current
performance of the properties," said Managing Director Eric
Rothfeld.  "More than 75% of GGP loans rated by Fitch have actual
debt service coverage ratios (DSCRs) greater than 1.50 times (x)
and 67% are greater than 2.0x."

Fitch reviewed in detail all 34 Fitch rated CMBS transactions with
GGP exposures greater than 5% of the remaining deal balance and
applied conservative loss severities based on property DSCR.
Fitch found that even for the deals with the most exposure to GGP
loans with relatively low DSCRs (below 1.50x), estimated losses
would generally only impact 'B' rated bonds, and the bonds above
'BB' would not likely warrant rating actions.

These transactions include J.P. Morgan 2002-CIBC4, J.P. Morgan
2005-LDP4, Morgan Stanley 2005-IQ9, and Merrill Lynch Mortgage
Trust 2006-C1.

Refinance risk remains a material issue given the limited
liquidity in the financial markets and weaknesses in the retail
sector.  However, only eight GGP loans in Fitch-rated CMBS
transactions have a final maturity in 2009 and each has a current
DSCR greater than 1.60x which provides for some cushion in
refinancing the loan in an environment with more conservative
lending standards.

From a longer term perspective, Fitch believes that a GGP
bankruptcy filing could have negative implications for property
performance and operations.  GGP malls are generally dominant
malls in their region.  If a bankruptcy were to occur, funds
necessary for the ongoing capital expenditures utilized for
renovation and leasing costs may be limited to excess cash flow
from the property or DIP financing in a Chapter 11 reorganization.

GGP-sponsored CMBS loans do not typically have funded reserves for
these expenses.  Further, national leasing relationships developed
by GGP will be less productive in the event of a bankruptcy,
potentially increasing property vacancy.  Finally, property
management may suffer as corporate level stress will likely affect
the ability to attract and retain the talented property managers
that have historically operated GGP's mall portfolio; bankruptcy
could also delay termination of management contracts if necessary.

CMBS loans secured by GGP properties will not be impacted in the
near term in the event of a corporate-level bankruptcy.  The
properties generally continue to maintain strong performance as
dominant regional malls located throughout the United States.

However, in light of the longer term implications of a GGP
bankruptcy, Fitch will continue to monitor CMBS transactions with
large exposures to these malls, and will take rating actions based
on property performance accordingly.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from
this site, at all times.  Fitch's code of conduct,
confidentiality, conflicts of interest, affiliate firewall,
compliance and other relevant policies and procedures
are also available from the 'Code of Conduct' section of this
site.


GENERAL MOTORS: Default Risk Hinges on Government Action, S&P Says
------------------------------------------------------------------
Standard & Poor's Ratings Services said that, in light of the U.S.
Senate's rejection last night of an emergency loan package for
General Motors Corp. and Chrysler LLC, the risk of default by one
or both of these companies over the next few months remains very
high.  The Bush Administration said it will consider using funds
earmarked for the financial industry stabilization package to
support the U.S. automakers' near-term liquidity needs.  The U.S.
Treasury said it stands ready to prevent an imminent failure of
the automakers.  However, the Treasury has not yet indicated how
the automakers can access the funding provided through the
Troubled Asset Relief Program, or TARP.

It is also uncertain where TARP loans would stand in the automaker
capital structure.  Ford Motor Co. is not currently seeking
federal loans, primarily because it has a large unused bank
facility.  The current ratings on all three automakers already
reflect their high default risk and are therefore not changed by
the U.S. Senate vote.

S&P applies ratings in the 'CCC' category to companies that are
highly likely to default on a debt payment and that depend on
multiple factors beyond their control to meet their financial
commitments.  The 'CC' rating on GM reflects these risks, as well
as the company's stated intention that it will seek to reduce its
current debt burden by more than half as it attempts to reduce
cash outflows and win support for the U.S. government-backed
loans.  S&P believes the most likely scenario is that GM will
offer to exchange some or all of its outstanding debt for equity
or new debt at a steep discount to face value.  Given GM's
weakening liquidity position, S&P considers such an offer to be a
distressed exchange and, as such, is tantamount to a default.

In S&P's view, the catalyst for a GM or Chrysler bankruptcy in the
very near term is unchanged: liquidity dropping below the minimum
levels needed to operate their capital-intensive vehicle
manufacturing businesses.  The automakers ordinarily make
substantial payments to their suppliers early each month, and S&P
believes the several billion dollars in outlays expected during
the first few days of January 2009 could use up a substantial
portion of both companies' respective cash balances, unless U.S.
government support of some kind is forthcoming or the suppliers
defer these payments.  Consumer demand in the U.S. and other key
markets has only worsened since these companies first said they
might not have enough cash to support operations into early next
year.  In addition, S&P believes concerns about bankruptcies have
added to the declines in GM's and Chrysler's sales and therefore
heightened their cash use.

In addition, S&P remains concerned about the spillover effects of
an automaker failure on the North American parts suppliers.  Many
important suppliers sell parts to more than one automaker, and as
S&P has stated previously, if GM or Chrysler should file for
bankruptcy, withhold payments to suppliers, or be forced to halt
operations, the repercussions to the suppliers would be dramatic.
S&P placed 15 suppliers on CreditWatch with negative implications
on Nov. 13, 2008, as a result of their significant exposure to the
Michigan-based automakers.

Ford's liquidity remains materially better than that of the other
two Michigan-based automakers.  However, if GM or Chrysler were to
file for bankruptcy, Ford may have to use its liquidity to keep
its supply base intact.

S&P's recovery ratings on U.S. automaker debt are based on the
assumption of a bankruptcy filing, multi-year reorganization, and
eventual emergence.  These ratings are not affected by the
developments.  Expected recovery prospects for secured and
unsecured debtholders vary by automaker, largely reflecting the
company-specific mix of secured and unsecured debt in the capital
structure rather than vastly different fundamentals for each
company.

                          Ratings List

                      General Motors Corp.

         Corporate Credit Rating          CC/Negative/--

         Senior Secured                   CCC
           Recovery Rating                1

         Senior Unsecured                 CC
           Recovery Rating                4

                          Ford Motor Co.

        Corporate Credit Rating           CCC+/Negative/--

         Senior Secured                   CCC+
           Recovery Rating                3

         Senior Unsecured                 CCC-
           Recovery Rating                6

                         Chrysler LLC

        Corporate Credit Rating          CCC+/Negative/--

         Senior Secured
          $7 bil. first-lien term bank ln
          due 2013                        B
           Recovery Rating                1

          $2.0 bil. second-lien bank ln
          due 2014                        CCC+
           Recovery Rating                4


GENERAL MOTORS: Lets GMAC Defer $1.5B Payment Until Dec. 30
-----------------------------------------------------------
GMAC LLC disclosed in a regulatory filing with the Securities and
Exchange Commission that as a result of the change in payment
terms, GMAC will be able to defer payment until Dec. 30, 2008, of
up to $1.5 billion in cash due to General Motors Corporation.
During the shipping period GM will have a security interest in the
financed vehicles.

On Dec. 9, 2008, GM and GMAC LLC agreed on a temporary basis to
adjust GMAC's terms for making advance payments to GM for
wholesale financing of vehicles sold to GM dealers.  GM typically
has an increase in its inventory levels in advance of the year-end
shut down and this adjustment will help finance purchases of this
inventory.

Ordinarily, GMAC pays GM the invoice amount for a vehicle shipped
by GM to a GMAC financed dealer on the first business day after
the shipping date. Beginning on Dec. 9, 2008, GMAC will be
obligated to pay GM the invoice amount when the amounts are due
from dealers.

As reported by the Troubled Company Reporter on Dec. 11, auto
lender GMAC and its home mortgage-making subsidiary Residential
Capital LLC are negotiating with bondholders over changes in the
exchange offers announced in November.  Less than 25% of the debt
was tendered, according to GMAC.  The company said 75% is required
to complete the transaction and enable becoming a bank holding
company.

                         About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.

For three months ended Sept. 30, 2008, the company reported net
loss of $2.5 billion compared to net loss of $1.5 billion for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company incurred net
loss of $5.5 billion compared to $1.6 billion for the same period
in the previous year.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $211.3 billion, total liabilities of $202.0 billion and
members' equity of about $9.3 billion.

                      About General Motors

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units.  GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela.  GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.

As reported in the Troubled Company Reporter on Nov. 10,
2008, General Motors Corporation's balance sheet at
Sept. 30, 2008, showed total assets of $110.425 billion, total
liabilities of $170.3 billion, resulting in a stockholders'
deficit of $59.9 billion.


GMAC LLC: Extends Notes Offerings to December 26
------------------------------------------------
GMAC Financial Services amended and extended its separate private
exchange offers and cash tender offers to purchase and exchange
certain of its and its subsidiaries' and Residential Capital,
LLC's outstanding notes in order to reflect an agreement in
principle reached with representatives of a substantial portion of
the outstanding notes.

This is GMAC Financial's fourth extension of the early delivery
time to provide investors the opportunity to consider the GMAC and
ResCap offers.

GMAC said that the amount of notes covered by the agreement in
principle on the material terms of the offer represents
substantial progress toward attaining the estimated overall
participation that would be required to satisfy the condition for
a minimum amount of regulatory capital in connection with GMAC's
application to become a bank holding company.  However,
significant additional participation will also be required.  In
order for the condition to be satisfied, the estimated overall
participation in the offers would be required to be approximately
75% on a pro rata basis.

The Federal Reserve has informed GMAC that if GMAC is unable to
meet these capital requirements, it will not approve GMAC's
application to become a bank holding company.

GMAC disclosed that it has extended the early delivery time with
respect to the offers to 5:00 p.m., New York City time, on Dec.
16, 2008, and extended the expiration date of the offers to 11:59
p.m., New York City time, on Dec. 26, 2008.  The withdrawal
deadline with respect to the offers has not been extended.

The amendments include an increase in the annual dividend rate to
9% (to be reduced to 7% after GMAC shall have raised at least
$2 billion of new Tier 1 capital, $750 million of which is to be
contributed by GMAC's existing shareholders) and the addition of
certain covenants relating to the new guaranteed notes, including
restrictions on liens, subsidiary guarantees and asset sales.

To date, approximately $6.8 billion in aggregate principal amount
or 24% of the outstanding GMAC old notes have been tendered in the
GMAC offers and approximately $2.4 billion in aggregate principal
amount or 25% of the outstanding ResCap old notes have been
tendered in the ResCap offers.  These results do not include the
notes covered by the agreement in principle.

GMAC intends to distribute supplements to the confidential
offering memoranda distributed with respect to the GMAC and ResCap
offers, containing the complete final amendments to the terms and
conditions of the GMAC and ResCap offers.

Global Bondholder Services Corporation, the information agent for
the offers, is available to assist investors with questions
regarding the tender and exchange process or other logistical
issues, at (866) 794-2200 (U.S. Toll-free).  Documents relating to
the offers will only be distributed to holders of the old notes
who complete and return a letter of eligibility confirming that
they are within the category of eligible investors for this
private offer.  Noteholders who desire to obtain a copy of the
eligibility letter should also contact Global Bondholder Services
Corporation.

                         About ResCap

Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit
of GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.

                         About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.

For three months ended Sept. 30, 2008, the company reported net
loss of $2.5 billion compared to net loss of $1.5 billion for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company incurred net
loss of $5.5 billion compared to $1.6 billion for the same period
in the previous year.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $211.3 billion, total liabilities of $202.0 billion and
members' equity of about $9.3 billion.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 15, 2008,
Standard & Poor's Ratings Services said that its ratings on GMAC
LLC (CC/Watch Neg/C) and its 100% owned subsidiary, Residential
Capital LLC (CC/Watch Neg/C) are not affected by GMAC's
announcement that it extended the early delivery time with respect
to separate private exchange offers and cash tender offers to
purchase or exchange certain of its and its subsidiaries' and
Residential Capital's outstanding notes to provide investors with
a final opportunity to consider the GMAC and Residential Capital
LLC offers.


GMAC LLC: Gets Dec. 30 Extension of $1.5-Bil. Owed to GM
--------------------------------------------------------
GMAC LLC disclosed in a regulatory filing with the Securities and
Exchange Commission that as a result of the change in payment
terms, GMAC will be able to defer payment until Dec. 30, 2008, of
up to $1.5 billion in cash due to General Motors Corporation.
During the shipping period GM will have a security interest in the
financed vehicles.

On Dec. 9, 2008, GM and GMAC LLC agreed on a temporary basis to
adjust GMAC's terms for making advance payments to GM for
wholesale financing of vehicles sold to GM dealers.  GM typically
has an increase in its inventory levels in advance of the year-end
shut down and this adjustment will help finance purchases of this
inventory.

Ordinarily, GMAC pays GM the invoice amount for a vehicle shipped
by GM to a GMAC financed dealer on the first business day after
the shipping date. Beginning on Dec. 9, 2008, GMAC will be
obligated to pay GM the invoice amount when the amounts are due
from dealers.

As reported by the Troubled Company Reporter on Dec. 11, auto
lender GMAC and its home mortgage-making subsidiary Residential
Capital LLC are negotiating with bondholders over changes in the
exchange offers announced in November.  Less than 25% of the debt
was tendered, according to GMAC.  The company said 75% is required
to complete the transaction and enable becoming a bank holding
company.

                      About General Motors

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units.  GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela.  GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.

As reported in the Troubled Company Reporter on Nov. 10,
2008, General Motors Corporation's balance sheet at
Sept. 30, 2008, showed total assets of $110.425 billion, total
liabilities of $170.3 billion, resulting in a stockholders'
deficit of $59.9 billion.

                         About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.

For three months ended Sept. 30, 2008, the company reported net
loss of $2.5 billion compared to net loss of $1.5 billion for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company incurred net
loss of $5.5 billion compared to $1.6 billion for the same period
in the previous year.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $211.3 billion, total liabilities of $202.0 billion and
members' equity of about $9.3 billion.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 15, 2008,
Standard & Poor's Ratings Services said that its ratings on GMAC
LLC (CC/Watch Neg/C) and its 100% owned subsidiary, Residential
Capital LLC (CC/Watch Neg/C) are not affected by GMAC's
announcement that it extended the early delivery time with respect
to separate private exchange offers and cash tender offers to
purchase or exchange certain of its and its subsidiaries' and
Residential Capital's outstanding notes to provide investors with
a final opportunity to consider the GMAC and Residential Capital
LLC offers.


GMAC LLC: Tries to Lure Potential Investors to Raise Capital
------------------------------------------------------------
GMAC LLC is negotiating with potential investors to help it raise
$1.25 billion in fresh capital needed for the Federal Reserve to
start backstopping the company's finances, Aparajita Saha-Bubna at
The Wall Street Journal reports, citing people familiar with the
matter.

As reported by the Troubled Company Reporter on Dec. 11, 2008,
GMAC Financial Services threatened bondholders that it would
abandon its effort to become a bank holding company if it doesn't
get the required support from them.  GMAC failed to lure enough
bondholders to $38 billion debt exchange offer and so the company
failed to raise enough capital for it to become a bank holding
company.  GMAC must raise $2 billion of new capital and have at
least $30 billion in total regulatory capital.  By becoming a
bank, GMAC will be able to access the Treasury's $700 billion
rescue fund.  It will also allow GMAC to sell bonds backed by the
Federal Deposit Insurance Corp., giving it new funding.  GMAC was
shut out of the public market for bonds backed by auto loans for
the past six months.  GMAC asked bondholders in November to tender
their securities for at least 55 cents in cash or a combination of
new notes and preferred stock, which would count as regulatory
capital.  GMAC's debt exchange offer is extended to GMAC and
Residential Capital LLC investors.  GMAC extended for the third
time the delivery deadline for debt holders to Dec. 12.

WSJ relates that lenders agreed to amended terms of the
$38 billion restructuring of debt obligations threatening to
overwhelm GMAC.  WSJ quoted GMAC spokesperson Gina Proia as
saying, "But we are working diligently to raise the remaining new
capital needed."

According to WSJ, GMAC has to raise $2 billion from existing
shareholders or new investors to meet bank holding company rules.
GMAC said in a statement that shareholders are bringing in over
$750 million of the $2 billion sum.  WSJ relates that the
shareholders are likely to refuse to bring in more.


                         About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.

As reported in the Troubled Company Reporter on Nov. 13, 2008,
Fitch Ratings has downgraded GMAC LLC's issuer default rating and
senior unsecured debt: (i) IDR to 'CCC' from 'B+'; and (ii) senior
unsecured debt to 'CC' from 'B+'.


GRAHAM ENTERTAINMENT: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Graham Entertainment Complex, Inc.
        dba Graham Central Station
        6999 E. Business I-10
        Odessa, TX 79762-5483

Bankruptcy Case No.: 08-70233

Chapter 11 Petition Date: December 5, 2008

Court: Western District of Texas (Midland)

Judge: Ronald B. King

Debtor's Counsel: Wiley France James, III, Esq.
                  zpal@jghpc.com
                  James & Haugland, P.C.
                  P.O. Box 1770
                  El Paso, TX 79949-1770
                  Tel: (915) 532-3911
                  Fax: (915) 541-6440

Estimated Assets: below $50,000

Estimated Debts: $1,000,000 to $10,000,000

The Debtor did not file a list of 20 largest unsecured creditors.

The petition was signed by Federico Gonzales, president of the
company.


GRANT FOREST: S&P Junks Corporate Credit Rating; Outlook Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered the long-term
corporate credit rating on Toronto-based Grant Forest Products
Inc. to 'CCC+' from 'B-'.  The outlook is negative.

"The downgrade stems from our expectation that Grant will continue
to generate very weak profitability and cash flow in the next
several quarters, potentially causing the company's liquidity to
deteriorate," said S&P's credit analyst Donald Marleau.  At the
current oriented strandboard price of US$165/msf, Grant is
generating negative EBITDA, which S&P believes will result in a
deterioration of the company's large cash balance.  Furthermore,
the prospects for a sustained improvement are uncertain amid the
seasonal slowdown in construction and a depressed North American
new home construction market.

The rating on Grant reflects what S&P see as its high debt
leverage, volatile earnings and cash flow, and narrow product
focus in OSB.  These factors are partially offset in S&P's view by
the company's modern cost-efficient facilities and good fiber
integration.  The company's two new OSB mills in Allendale and
Clarendon, South Carolina, will improve operating diversity and
mitigate foreign currency exposure because about 50% of OSB
production will be in the U.S. Grant's cost profile will also
improve when both of the new mills are operating at full design
capacity.  Although the closure of high-cost capacity in the
current downturn has flattened the industry's cost curve, Grant's
new facilities will be among the lowest cost OSB mills in the
industry.

Grant is a leading manufacturer of OSB, which is a plywood
substitute used primarily in residential construction and
remodeling.  Although the company has increased its production
capacity by 47% with the addition of the two new mills, only the
Allendale facility is operating at full capacity, while the
Clarendon mill has delayed its startup amid the industry slump.
The expansions will make Grant the fourth-largest OSB producer in
North America with 3.6 billion square feet of capacity.  The
company also operates two mills in northern Ontario and has a 50%
ownership interest with Ainsworth Lumber Co. Ltd. (B-/Negative/--)
in the Footner mill in High Level, Alta.  The company's Timmins
mill in northern Ontario has been shut down because of a labor
dispute, and production at the High Level facility was curtailed
indefinitely in November 2007 due to weak market conditions.

The negative outlook reflects S&P's view that, although Grant has
a large cash balance, weak OSB prices in the next several months
could result in an ongoing operating cash burn, increasing
pressure on the company's liquidity.  S&P could lower the rating
if Grant's profitability and cash flow remain weak enough that the
company risks breaching covenants in its credit agreement
within the next year, which would likely occur if OSB prices
remained below US$185/msf for several quarters.  Alternatively,
S&P could revise the outlook to stable or raise the rating if OSB
prices improve to a level where Grant is able to sustain positive
free operating cash flow.


GREENBRIER COMPANIES: Moody's Affirms 'B1' Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service has affirmed the B1 Corporate Family
Rating of The Greenbrier Companies, but has changed outlook to
negative from stable.  At the same time, Moody's has lowered the
ratings of Greenbrier's unsecured notes to B3 from B2, reflecting
the increasing levels of senior secured debt in the capital
structure and lower estimated recovery of these notes in the event
of default.

Greenbrier's B1 corporate family rating reflects the company's
high debt levels resulting from recent acquisitions, along with
margin and coverage levels that are weaker than other rated rail
car manufacturers and lessor companies.  Operating margins have
remained below historical levels in 2008 -- 5.7% for the year
ending August 2008 -- and are expected to remain below the 9-12%
range typical of Ba-rated companies in this sector.  Manufacturing
margins are of particular concern (less than 2% in FY 2008), as
recent profitability in this area has been negatively affected by
operating losses associated with Greenbrier's Canadian Facility
(now closed), as well as by start-up costs relating to its Mexican
JV operations.  However, Greenbrier benefits from higher margins
contributed by the car repair and refurbishment segment (over 40%
of total revenue), which partially offsets the effects of weakness
in the rail car OE and leasing businesses.  Also, the cessation of
operations at Greenbrier's troubled Canadian manufacturing
facility eliminates a long-running drag on profits.

The ratings outlook was changed to negative to reflect Moody's
expectations that operating margins, manufacturing in particular,
will remain relatively weak through the industry downcycle.  This
will likely constrain the company from improving credit metrics
materially over the near term, and will limit the degree to which
the company can repay debt over this time.  Moody's expects that
railcar demand, a key driver to revenue growth in the company's
core manufacturing and leasing segments, will remain soft through
2009, reflecting the depth and duration of the current economic
downturn in North America.

The rating could be pressured down if Greenbrier loses a key
customer or supplier and is unable to quickly replace that revenue
or supply, or if the company undertakes any further material
acquisitions, particularly if the investment is outside of the
company's existing business model.  If EBIT to Interest falls
below 1.5 times, or if the company is unable to generate
meaningful free cash flow to reduce debt as the railcar cycle
turns down the rating could also be pressured downward.

The rating or the outlook could be stabilized if Greenbrier is
able to sustain a consolidated operating margin above 6% over the
cycle, particularly if manufacturing margins can be improved.  The
ability to restore EBIT to Interest to the 2.0 times range and
debt to EBITDA less than 5 times would also be important factors
to stabilizing the outlook.

Greenbrier's senior unsecured notes' ratings were lowered to B3
from B2 as the result of changes in the company's debt structure
over the past year, whereby the company has added a significant
amount of senior secured debt in the form of secured notes related
to railcar leasing assets.  The incremental senior debt reduces
the estimated recovery that these notes would receive in the event
of default.  Per Moody's Loss Given Default Methodology, this
increased level of implied loss results in an increased notching,
from one notch to two, below the Corporate Family Rating.

Downgrades:

Issuer: Greenbrier Companies, Inc. (The)

  -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to B3
     (LGD5, 78%) from B2

  -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3
     (LGD5, 78%) from B2

Outlook Actions:

Issuer: Greenbrier Companies, Inc. (The)

  -- Outlook, Changed To Negative From Stable

The last rating action on Greenbrier was a downgrade of the
company's Corporate Family Rating to B1 on March 28, 2007.

The Greenbrier Companies manufacture railroad freight cars, with
particular strength as the leading producer of intermodal flat
cars, and also repairs railroad freight cars and provide wheels
and various car parts.  Greenbrier owns a modest-sized portfolio
of 9,000 railcars, which it leases to third parties, and provides
a range of management services for approximately 138,000 other
railcars.


GREENSTONE RESOURCES: Creditors Accept Plan of Arrangement
----------------------------------------------------------
Shimmerman Penn Title & Associates Inc., trustee of the bankruptcy
estate of Greenstone Resources Ltd., confirmed that:

   a) at a meeting of the company's creditors held on Jan. 25,
      2007, to consider the amended consolidated plan of
      arrangement, the required majority of the company's
      creditors present and voting at the meeting accepted the
      plan of arrangement; and

   b) on Jan. 30, 2007, the Ontario Superior Court of Justice
      made an order in connection with the reorganization of the
      company pursuant to the Companies' Creditors Arrangement Act
      and Canada Business Corporations Act.

The Trustee has advised that the implementation of the plan of
arrangement is subject to various conditions, including obtaining
certain regulatory approvals.  One required regulatory approval
involves the lifting by applicable securities regulatory
authorities of applicable cease trade orders, which continue to
remain in place.

Headquartered in Toronto, Ontario, Greenstone Resources Ltd.
(Nasdaq:GRERF.PK) owns gold operations in Honduras and
Nicaragua.


HANCOCK FABRICS: Posts $70.6 Million Net Sales for 3rd Qtr. 2008
----------------------------------------------------------------
Hancock Fabrics Inc. said net sales for the third quarter rose
1.3% to $70.6 million from $69.7 million last year, with same-
store sales increasing 2.1%.  Sales for the year-to-date period
increased 0.7% to $198.2 million for the nine months ended Nov. 1,
2008, from $196.9 million for the corresponding period of the
prior year.  Same-store sales increased 2.8% for the year-to-date
period.

The 2.1% increase in same-store sales for the quarter was
primarily the result of an increase in the number of store
transactions.  For the year-to-date period, the 2.8% increase in
same store sales was primarily due to increases in average
transactions and increases in the number of customer transactions.

The company's gross margin rate decreased 460 basis points to
40.0% in the third quarter and 260 basis points on a year-to-date
basis to 41.4%.  Excluding the impact of the LIFO inventory
reserve, gross margin rate decreased 200 basis points to 43.0% in
the third quarter but increased 30 basis points on a year-to-date
basis to 43.7%.  The decline in the gross margin rate for the
third quarter was driven primarily by an increase in distribution
costs partly offset by a 100 basis point increase in merchandise
margin.  The year-to-date gross margin rate increase was primarily
driven by an increase in merchandise margin.  This increase in
merchandise margin was principally due to a reduction in clearance
and promotional programs as well as benefits from ongoing product
sourcing initiatives.

The net loss for the quarter ended Nov. 1, 2008, of $2.5 million
compared to a $6.1 million loss for the quarter ended Nov. 3,
2007, both inclusive of bankruptcy related costs.  The year-to-
date net loss was $20.9 million for the nine months ended
Nov. 1, 2008, compared to a net loss of $20.7 million for the
corresponding period of the prior year, both inclusive of
bankruptcy related costs.

Jane Aggers, Chief Executive Officer and President, said, "We are
encouraged with our progress this year despite the current
economic climate.  Our team has been able to drive positive
comparative growth by increasing transaction counts and improving
the average transaction total.  In addition to driving the top
line, we have been able to expand our margin rates by reducing
clearance and promotional programs, while improving our product
sourcing. We have also concentrated on lowering our selling,
general, and administrative costs.  As we move forward into the
fourth quarter, we will maintain focus in these same areas while
attempting to maintain the top line in this challenging
environment."

EBITDA on a FIFO basis from continuing operations excluding
reorganization expenses for the third quarter of fiscal 2008 was
$2.1 million versus $0.3 million for the same period last year.
Year-to-date fiscal 2008 was a loss of $0.3 million versus a
profit of $0.8 million in the first nine months of fiscal 2007.
This increase in the current quarter is primarily driven by
reductions in selling, general and administrative expenses.  The
slight deterioration in the year-to-date amount is the result of
fiscal 2007 selling, general and administrative expenses including
certain credits related to the reduction in force driven by the
store liquidation process.

Third quarter reported debt levels totaled $56.2 million, net of
bond issuance discount of $11.1 million. During the quarter, the
Company generated over $11.0 million of cash flow from operations.
Approximately $2.0 million of this cash flow was utilized for
capital spending.  The remainder was put towards the revolver
balance.  At the end of the third quarter, the Company had over
$32 million of availability under its revolving credit facility
compared to $21 million availability under its credit facility as
of the end of the second quarter.  As of Dec. 1, 2008,
availability under the revolving credit facility increased to
approximately $37 million.

During the first nine months of fiscal 2008, the Company opened
one new store, relocated four stores and remodeled 63 stores.

A full-text copy of Hancock Fabrics' Financial Results for Third
Quarter of 2008 is available for free at:

               http://ResearchArchives.com/t/s?363a

                      About Hancock Fabrics

Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc.
(OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty
retailer of a wide selection of fashion and home decorating
textiles, sewing accessories, needlecraft supplies and sewing
machines.  Hancock Fabrics is one of the largest fabric retailers
in the United States, currently operating approximately 400 retail
stores in approximately 40 states.  The company employs
approximately 7,500 people on a full-time and part-time basis.
Most of the company's employees work in its retail stores, or in
field management to support its retail stores.  The company and
six of its debtor-affiliates filed for chapter 11 protection on
March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353).  Robert J.
Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represents the
Debtors.  The U.S. Trustee for Region 3 appointed five creditors
to serve on an Official Committee of Unsecured Creditors.  The
Court confirmed the Debtors' joint consolidated plan of
reorganization on July 22, 2008.


HAWAIIAN TELCOM: Wants Chapter 11 Case Moved to Hawaii
------------------------------------------------------
Hawaiian Telcom Communications Inc. will ask the U.S. Bankruptcy
Court for the District of Delaware to allow the transfer of its
Chapter 11 cases to the Bankruptcy Court in Hawaii, Honolulu.  The
Debtor has reached a stipulation with the state of Hawaii
regarding the transfer.

The company filed its Chapter 11 cases in Delaware as Hawaiian
Telcom is incorporated under Delaware law, and the Delaware Court
is in close proximity to its advisors involved in the case which
would assist in mitigating costs to the company.

Following discussions with various constituents, Hawaiian Telcom
determined that it is appropriate to move the Chapter 11 cases to
the local bankruptcy court.  The company considers that the move
will be a positive step in the restructuring process.

The company expects that the hearing on the motion to approve the
stipulation will be scheduled for Dec. 23, 2008, in Wilmington,
Delaware.

                      About Hawaiian Telecom

Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. -
- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.  The company and five of its affiliates filed
for Chapter 11 protection on Dec. 1, 2008 (Bankr. D. Del. Lead
Case No. 08-13086).  Richard M. Cieri, Esq., Paul M. Basta, Esq.,
and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP,
represent the Debtors in their restructuring efforts.  The Debtors
proposed Lazard Freres & Co. LLC as investment banker; Zolfo
Cooper Management LLC as business advisor; Deloitte & Touche LLP
as independent auditors; and Kurztman Carson Consultants LLC as
notice and claims agent.  When the Debtors filed for protection
from their creditors, they listed total assets of $1,352,000,000
and total debts of $1,269,000,000 as of Sept. 30, 2008.


HEALTHSOUTH CORP: 3 Executives Acquire 34,900 Shares
----------------------------------------------------
Edward L. Shaw, Jr., director of HealthSouth Corp., disclosed in a
Form 4 filing with the Securities and Exchange Commission that he
acquired 5,000 shares of the company's common stock on Nov. 13,
2008.  He acquired the shares at prices of $10.82 to $10.88
apiece, and owned a total of 26,653 shares following the
purchases.

John L. Workman, the company chief financial officer, also
disclosed the purchase of 5,000 shares of common stock as of
Nov. 10, 2008.  He acquired the shares at $11.74 to $11.78 apiece,
and owned an aggregate 96,705 shares following the purchases.

In a separate filing, Jay Grinney, chief executive officer of the
company, disclosed that he may be deemed to directly own 392,653
shares of the company's common stock after the acquisition of
24,900 shares of common stock on Nov. 10, 2008.

The company has 88,022,103 shares of common stock outstanding, net
of treasury shares, as of Oct. 31, 2008.

                     About HealthSouth Corp.

Headquartered in Birmingham, Alabama, HealthSouth Corp. (NYSE:
HLS) -- http://www.healthsouth.com/-- provides inpatient
rehabilitation services.  Operating in 26 states across the
country and in Puerto Rico, HealthSouth serves more than 250,000
patients annually through its network of inpatient rehabilitation

hospitals, long-term acute care hospitals, outpatient
rehabilitation satellites, and home health agencies.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $1.9 billion and total liabilities of $3.3 billion, resulting
in a shareholders' deficit of about $1.4 billion.

For three months ended Sept. 30, 2008, the company's net income
was $6.6 million compared with net income of $287.6 million for
the same period in the previous year.

For nine months ended Sept. 30, 2008, the company reported net
income of $70.5 million compared with net income of $699.2 million
for the same period in the previous year.

In total and through October 2008, the company has reduced its
total debt outstanding by approximately $208 million since
Dec. 31, 2007.  Total debt outstanding approximated $1.8 billion
as of Oct. 31, 2008.


HEALTHSOUTH CORP: Executives Buy Shares of Stock, Disclose Stake
----------------------------------------------------------------
John E. Maupin, Jr. DDS, a director of Healthsouth Corporation,
disclosed in a regulatory filing with the Securities and Exchange
Commission that he may be deemed to beneficially own 15,898 shares
of the company's common stock after the Nov. 26, 2006, acquisition
of 1,000 shares of common stock at $10.0488 per share.

In a separate filing, Edward A. Blechschmidt, a director of the
company, disclosed that he acquired 4,000 shares of the company's
common stock on Nov. 20, 2008.  He acquired the shares at $8.99 to
$9.52 apiece.  After the acquisitions, Mr. Blechschmidt may be
deemed to directly own 21,187 shares.

John P. Whittington, general counsel & secretary of the company,
also disclosed that he acquired 9,000 shares of the company's
common stock on Nov. 12, 2008.  After the acquisitions, Mr.
Whittington may be deemed to directly own 52,857 shares.

Edmund Fay, senior vice president and treasurer, also disclosed
that he may be deemed to beneficially own 8,750 shares after the
Nov. 12, 2008, purchase of 3,250 shares of common stock at
$10.99 per share.

The company has 88,022,103 shares of common stock outstanding, net
of treasury shares, as of Oct. 31, 2008.

                     About HealthSouth Corp.

Headquartered in Birmingham, Alabama, HealthSouth Corp. (NYSE:
HLS) -- http://www.healthsouth.com/-- provides inpatient
rehabilitation services.  Operating in 26 states across the
country and in Puerto Rico, HealthSouth serves more than 250,000
patients annually through its network of inpatient rehabilitation
hospitals, long-term acute care hospitals, outpatient
rehabilitation satellites, and home health agencies.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $1.9 billion and total liabilities of $3.3 billion, resulting
in a shareholders' deficit of about $1.4 billion.

For three months ended Sept. 30, 2008, the company's net income
was $6.6 million compared with net income of $287.6 million for
the same period in the previous year.

For nine months ended Sept. 30, 2008, the company reported net
income of $70.5 million compared with net income of $699.2 million
for the same period in the previous year.

In total and through October 2008, the company has reduced its
total debt outstanding by approximately $208 million since Dec.
31, 2007.  Total debt outstanding approximated $1.8 billion as of
Oct. 31, 2008.


HELIX ENERGY: Moody's Reviews 'B2' Ratings for Possible Downgrade
-----------------------------------------------------------------
Moody's Investors Service placed Helix Energy Solutions Group,
Inc.'s ratings under review for possible downgrade following
Helix's announcement that the company intends to divest all or a
portion of its oil and gas assets, its interest in Gulf of Mexico
production facilities and its 58% stake in the oil field services
company Cal Dive International.  Ratings affected include Helix's
B2 Corporate Family Rating, B2 Probability of Default Rating, B3
(LGD4, 68%) senior unsecured rating and Ba2 (LGD 2, 20%) senior
secured rating.  Moody's also downgraded Helix's speculative grade
liquidity rating to SGL-4 from SGL-3.

The review for downgrade is a result of uncertainly following the
company's announcement that it intends to focus and reshape the
company's business model while reducing debt during a challenging
financial market.

The SGL-4 reflects Moody's expectation that the company's cash
flow will not be sufficient to cover capex, working capital needs
and interest expense over the next four quarters.  The SGL-4 also
considers the company's $420 million senior secured revolver (with
no borrowing base).  As of October 2008 Helix had less than $47
million of availability under its revolving credit agreement but
Moody's believes covenant compliance could be tight in 2009 given
effect to results of production interruption on current quarters.
Helix would require external financing through asset monetization
or liquidity from its ownership of Cal Dive's shares and its
interest in the GOM production facilities in order to finance
current operations and continue with the three vessel newbuild
program.

The last rating action was December 10, 2007, when Moody's
affirmed Helix's B2 CFR, assigned a B3 (LGD4, 68%) senior
unsecured note rating, and upgraded Helix's senior secured rating
to Ba2 (LGD 2, 20%).  The outlook was changed to positive from
stable.

Helix Energy Solutions Group, Inc. is headquartered in Houston,
Texas.


HEXION SPECIALTY: Inks $1BB Huntsman Settlement; Merger Canceled
----------------------------------------------------------------
Huntsman Corporation terminated its Merger Agreement with Hexion
Specialty Chemicals, Inc.  In addition, Huntsman reached an
agreement with Hexion, Apollo Management, L.P., and certain of its
affiliates to settle Huntsman's claims against Hexion, Apollo and
its affiliates arising in connection with Huntsman's Merger
Agreement with Hexion.  Payments to be made to Huntsman under the
Settlement Agreement total $1 billion.

In addition to the $325 million break-up fee to be paid as
provided in the Merger Agreement and which Hexion expects will be
funded by Credit Suisse and Deutsche Bank under an existing
commitment, certain affiliates of Apollo will make cash payments
to Huntsman under the Settlement Agreement totalling
$425 million.  Certain affiliates of Apollo also will pay Huntsman
an additional $250 million in exchange for 10 year convertible
notes issued by Huntsman in that principal amount, which may be
repaid at maturity in cash or common stock at Huntsman's election.

At least $500 million of the payments are to be paid to Huntsman
on or before December 31, 2008, and any remaining payments that
have not been made by that date must be made on or before
March 31, 2009.

The Settlement Agreement also resolves Huntsman's pending claims
against Apollo and its affiliates relating to Huntsman's prior
merger agreement with Basell AF.

In announcing the settlement, Huntsman's President and CEO Peter
R. Huntsman stated, "We are pleased to have reached this agreement
with Hexion and Apollo.  Receipt of these proceeds will enhance
the strength of Huntsman's balance sheet and better position our
company to prosper during the current turbulence in the global
economy.  Additionally, our associates, customers and suppliers
can now put the uncertainty concerning the outcome of the merger
with Hexion behind them."

Leon Black, Chairman of Apollo Global Management, LLC, added, "We
are happy to be resolving this situation in the best interest of
our investors.  It puts to an end the six month disagreement and
distraction between our companies.  As the majority stakeholder in
Hexion and now an investor in Huntsman, we look forward to both
companies traversing this economic cycle and prospering."

The settlement with Hexion, Apollo and its affiliates does not
resolve the claims asserted by Huntsman against the Banks in its
ongoing litigation against the Banks in Montgomery County, Texas.
Huntsman's suit against the Banks includes claims that the banks
conspired with Apollo and tortiously interfered with Huntsman's
prior merger agreement with Basell, as well as with the later
Merger Agreement with Hexion.  A jury trial on those claims
currently is set to begin on May 11, 2009.  As part of the
Settlement Agreement, Apollo and its principals have agreed to
fully cooperate in connection with Huntsman's litigation against
the Banks.

Huntsman noted in a filing with the Securities and Exchange
Commission that, of the $1 billion, certain affiliates of Apollo
have agreed to pay Huntsman $425 million in cash and purchase $250
million of Huntsman's 7% Convertible Senior Notes in that
principal amount.  In addition, Hexion has agreed to pay the
$325 million termination fee as required under the Merger
Agreement.  Apollo and its affiliates have agreed that at least
$500 million of the purchase from and payments to Huntsman will be
paid on or before December 31, 2008.  In addition, Hexion has
agreed to pay to Huntsman the $325 million termination fee as soon
as Hexion LLC receives the proceeds of the Termination Facility,
but in no event later than March 31, 2009.  Any portion of the $1
billion that has not been paid to Huntsman by
December 31, 2008, must be paid to Huntsman on or before
March 31, 2009.  The Notes will mature on the 10th anniversary of
the date they are issued.

Jon M. Huntsman, Founder and Executive Chairman of Huntsman
Corporation, commented, "This is a significant settlement for our
company and its shareholders, but we must continue to pursue our
multi-billion dollar Texas case against Credit Suisse and Deutsche
Bank for the harm they have caused.  We remain focused on
preparing for our May jury trial against the Banks."

A full-text copy of the Settlement Agreement and Release, dated
December 14, 2008, among Huntsman Corporation, Jon M. Huntsman,
Peter R. Huntsman, Hexion Specialty Chemicals, Inc., Hexion LLC,
Nimbus Merger Sub, Inc., Craig O. Morrison, Leon Black, Joshua J.
Harris and Apollo Global Management, LLC and certain of its
affiliates, is available at no charge at:

              http://ResearchArchives.com/t/s?3643

A full-text copy of the Letter Agreement, dated December 14, 2008,
among Huntsman Corporation, Jon M. Huntsman, Peter R. Huntsman,
Hexion Specialty Chemicals, Inc., Hexion LLC, Nimbus Merger Sub,
Inc., Craig O. Morrison, Leon Black, Joshua J. Harris and Apollo
Global Management, LLC and certain of its affiliates, is available
at no charge at:

              http://ResearchArchives.com/t/s?3644

Pursuant to the Letter Agreement, Huntsman agreed to pay the
Apollo Parties an amount of cash equal to 20% of the value of cash
and non-cash consideration that is in excess of $500 million that
the company may obtain or receive in settlement in connection with
any claims made by the company against the Banks arising from or
relating to the Merger Agreement, the transactions contemplated
thereby and related matters, including the Texas Action Against
the Banks, after the company first recovers its attorneys' fees,
costs and expenses in making the claim.  In no circumstance will
the aggregate amount of payments owed by the company to the Apollo
parties under the Letter Agreement exceed $425 million.  Moreover,
in the event trial commences in the Texas Action Against the
Banks, any interest on the part of the Apollo Parties will
terminate immediately and the company will not owe any portion of
any subsequent recovery to the Apollo Parties.  The Letter
Agreement and the obligations thereunder terminate if the company
is not paid in full the
$1 billion under the Settlement Agreement before April 1, 2009.

                     About Huntsman

Headquartered in Salt Lake City, Utah, Huntsman Corporation
(NYSE: HUN) -- http://www.huntsman.com/-- is a manufacturer of
differentiated chemical products and inorganic chemical
products.  The company operates in four segments: Polyurethanes,
Materials and Effects, Performance Products and Pigments.  Its
products are used in a range of applications, including those in
the adhesives, aerospace, automotive, construction products,
durable and non-durable consumer products, electronics, medical,
packaging, paints and coatings, power generation, refining,
synthetic fiber, textile chemicals and dye industries.  Its Latin
American operations are in Argentina, Brazil, Chile, Colombia,
Guatemala, Panama and Mexico.

At September 30, 2008, the company's consolidated balance sheet
showed US$8.41 billion in total assets, US$6.64 billion in total
liabilities, US$33.5 million in minority interests, and
US$1.73 billion in total stockholders' equity.

                        *     *     *

As reported by the Troubled Company Reporter on Oct. 3, 2008,
Standard & Poor's Ratings Services said that its ratings on
Huntsman Corp. and Hexion Specialty Chemicals Inc. remain on
CreditWatch with negative implications, where they were placed on
July 5, 2007.  The initial CreditWatch placement followed the
announcement of Hexion's proposed debt-financed acquisition of
Huntsman in a transaction valued at more than US$10 billion,
including assumed debt.

In June 2008, S&P said that its ratings on Huntsman Corp. (BB-
/Watch Neg/--) remain on CreditWatch with negative implications,
where they were placed on July 5, 2007.

As reported in the Troubled Company Reporter on Oct. 6, 2008,
Huntsman Corp. (Huntsman - Ba3 Corporate Family Rating - Rating
Under Review For Downgrade) issued a press release on Sept. 29,
2008 announcing the decision of the Delaware Court of Chancery to
enter judgment in favor of Huntsman denying all declarations
sought by Apollo Management, L.P. and Hexion Specialty Chemicals,
Inc., in their suit requesting that the Court excuse Hexion from
its obligation to consummate the pending transaction.

                    About Hexion Specialty

Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://www.hexionchem.com/-- is a producer of thermosetting
resins, or thermosets.  Thermosets are a critical ingredient in
virtually all paints, coatings, glues and other adhesives produced
for consumer or industrial uses.  Hexion Specialty Chemicals is
controlled by an affiliate of Apollo Management L.P.

Hexion's balance sheet at Sept. 30, 2008, showed total assets of
$3.8 billion and total liabilities of $5.4 billion, resulting in a
shareholders' deficit of $1.6 billion.


HEXION SPECIALTY: Restates 1st and 2nd Quarter 2008 Financials
--------------------------------------------------------------
Hexion Specialty Chemicals Inc. filed with the Securities and
Exchange Commission on November 21, 2008:

   -- Amendment No. 1 on Form 10-Q/A to amend its Quarterly
      Report on Form 10-Q, initially filed on May 14, 2008, for
      the quarter ended March 31, 2008, to restate the financial
      statements included therein;

   -- Amendment No. 1 on Form 10-Q/A to amend its Quarterly
      Report on Form 10-Q, initially filed on August 14, 2008,
      for the quarter ended June 30, 2008, to restate the
      financial statements included therein.

The restatement of the March 2008 earnings report resulted from
errors the Company discovered on November 10, 2008, in its non-
cash unrealized foreign exchange gains and losses on intercompany
balances recorded in the Company's results of operations during
the three months ended March 31, 2008.  The errors related to the
misapplication of procedures for a newly-implemented system
enhancement to record foreign exchange gains and losses on
intercompany balances.  The correction resulted in an increase of
$1 million in operating income, a decrease of $9 million in non-
operating income, and a decrease of $6 million in net income for
the three months ended March 31, 2008.

A full-text copy of the Company's Form 10-Q/A for the March 2008
reporting period is available at no charge at:

              http://ResearchArchives.com/t/s?3646

The restatement of the June 2008 earnings report resulted from
errors the Company discovered on November 10, 2008, in its non-
cash unrealized foreign exchange gains and losses on intercompany
balances recorded in the Company's results of operations during
the three and six months ended June 30, 2008.  The errors related
to the misapplication of procedures for a newly-implemented system
enhancement to record foreign exchange gains and losses on
intercompany balances.  The correction resulted in a decrease of
$2 million in operating income, an increase of $1 million in non-
operating income, and a decrease of $1 million in net income for
the three months ended June 30, 2008; and a decrease of
$1 million in operating income, a decrease of $8 million in non-
operating income, and a decrease of $7 million in net income for
the six months ended June 30, 2008.

A full-text copy of the Company's Form 10-Q/A for the June 2008
reporting period is available at no charge at:

              http://ResearchArchives.com/t/s?3645

                    About Hexion Specialty

Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://www.hexionchem.com/-- is a producer of thermosetting
resins, or thermosets.  Thermosets are a critical ingredient in
virtually all paints, coatings, glues and other adhesives produced
for consumer or industrial uses.  Hexion Specialty Chemicals is
controlled by an affiliate of Apollo Management L.P.

Hexion's balance sheet at Sept. 30, 2008, showed total assets of
$3.8 billion and total liabilities of $5.4 billion, resulting in a
shareholders' deficit of $1.6 billion.


HIDDEN SPLENDOR: Confirms Plan, Nears Emergence
-----------------------------------------------
Hidden Splendor Resources Inc., is nearing emergence after
confirming its Chapter 11 plan last week.

According to Bloomberg's Bill Rochelle, the plan provides for
these terms:

   -- The $5.9 million secured loan held by Zions First National
      Bank will be reinstated.

   -- Unsecured creditors with claims of $3.4 million are to
      receive between 50% and 70%.

   -- America West Resources LLC will provide a $2.25 million
      contribution,

As reported by the Dec. 11 of the Troubled Company Reporter,
America West Resources said that its wholly owned subsidiary,
Hidden Splendor, the Chapter plan will become effective on
Dec. 19, 2008, at which time the subsidiary will officially emerge
from bankruptcy.

                       About Hidden Splendor

Based in Reno, Nevada, Hidden Splendor Resources, Inc., is a real
estate investment trust.  The company and its affiliate, Mid-State
Services, Inc., filed for chapter 11 protection on Oct. 15, 2007
(Bankr. D. Nev. Case Nos. 07-51378 & 07-51379).  John A. White,
Jr., Esq., represents the Debtor in its restructuring efforts.
The U.S. Trustee for Region 17 has appointed five creditors to
serve on an Official Committee of Unsecured Creitors for the
Debtor's case.  Mark E. Freedlander, Esq., at McGuirewoods LLP,
represents the Committee.  Hidden Splendor diclosed estimated
assets between $10 million and $50 million and estimated debts
between $1 million and $10 million at the time of its filing.
Mid-State disclosed estimated assets and debts between $1 million
and $10 million.


HINES HORTICULTURE: Bid Procedures Ok'd; Dec. 16 Sale Hearing Set
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the proposed bid procedures for the sale of all or substantially
all of the assets of Hines Horticulture, Inc. and its affiliated
debtors, the procedures for the assumption and assignment of
assigned contracts, including notice of proposed cure amounts and
the grant of certain bid protections to the stalking horse bidder.

A full-text copy of the approved Bid Procedures is available for
free at http://researcharchives.com/t/s?3639

                    Objections to Cure Amounts

Where a counterparty to an executory contract or unexpired lease
files a timely Contract Objection asserting a higher cure amount
and the parties are unable to consensually resolve the dispute,
the amount to be paid under Sec. 365 of the Bankruptcy Code, if
any, with respect to such objection will be determined at the
hearing to be requested by the Debtors or by the objecting
counterparty.  If the Contract Objection cannot be resolved within
14 days following the closing of the sale (or before Dec. 29,
2008, in the case of leases of nonresidential real property), the
Pending Assigned Contracts shall be rejected in their entirety.

              Break-Up Fee and Expense Reimbursement

Pursuant to the Stalking Horse Agreement, the Stalking Horse
Bidder will be entitled to a Break-up Fee of $1,500,000 and
Expense Reimbursement not to exceed $775,000, exclusive of, and in
addition to, the Initial Work Fee.  The Debtors' obligation to pay
the Bid protections will constitute a superpriority administrative
expense claim in favor of the Buyer having priority over any and
all administrative expenses under Sec. 503(b) and 507(c) of the
Bankruptcy Code, junior only to the claims of the proposed
postpetition secured lenders.

                           Auction Sale

The Auction is scheduled on Dec. 15, 2008, at the offices of
Debtors' counsel, Young Conaway Stargatt & Taylor, LLP, The
Brandywine Building, 1000 West Street, 17th Floor, in Wilmington,
Delaware, or such later day or other place as the Debtors will
notify in writing counsel to the Committee and all Qualified
Bidders.

The Sale Hearing will be conducted at 11:30 a.m. on Dec. 16, 2008.
During the Sale Hearing, the Debtors will seek entry of an order
approving and authorizing the sale of the Acquired Assets to the
Successful Bidder.

                     About Hines Horticulture

Headquartered in Irvine, California, Hines Horticulture, Inc. --
http://www.hineshorticulture.com/-- operates nursery facilities
located in Arizona, California, Oregon and Texas.  Through its
affiliate, the company produces and distributes horticultural
products.  The company and its affiliate, Hines Nurseries, Inc.,
filed for Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del.
Lead Case No.08-11922).  Anup Sathy, Esq., Ray C.Schrock, Esq.,
and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructure efforts.  Robert S. Brady, Esq.,
and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor,
serve as the Debtors' co-counsel.  The Debtors selected Epiq
Bankruptcy Solutions LLC as their voting and claims agent, and
Financial Balloting Group LLC as their securities voting agent.
The U.S. Trustee for Region 3 appointed creditors to serve on an
Official Committee of Unsecured Creditors in the Debtors' case.
In its schedules, Hines Horticulture, Inc. listed total assets of
$30,068 and total debts of $218,052,380.  In its schedules, Hines
Nurseries, Inc. listed total assets of $229,231,003 and total
debts of $228,698,592.


HOVNANIAN ENTREPRISES: Fitch Affirms Issuer Default Rating at 'B-'
------------------------------------------------------------------
Fitch Ratings has affirmed Hovnanian Enterprises, Inc.'s Issuer
Default Ratings and outstanding debt ratings:

  -- IDR at 'B-';
  -- Senior secured revolving credit facility at 'BB-/RR1';
  -- Senior secured notes at 'BB-/RR1';
  -- Senior unsecured notes at 'B-/RR4';
  -- Senior subordinated notes at 'CCC/RR6';
  -- Series A perpetual preferred stock at 'CCC-/RR6'.

HOV's Rating Outlook remains Negative.

Fitch's Recovery Rating of '1' on HOV's secured revolving credit
facility and senior secured second-lien notes indicates
outstanding (90%-100%) recovery prospects for holders of these
debt issues.  The 'RR4' on HOV's senior unsecured notes indicates
average (30%-50%) recovery prospects for holders of these debt
issues.  HOV's exposure to claims made pursuant to performance
bonds and the possibility that part of these contingent
liabilities would have a claim against the company's assets were
considered in determining the recovery for the unsecured debt
holders.  The 'RR6' on HOV's senior subordinated notes and
preferred stock indicates poor recovery prospects (0%-10%) in a
default scenario.  Fitch applied a liquidation value analysis for
these RRs.

The ratings and Outlook for HOV reflect the current very difficult
housing environment and Fitch expectations that housing activity
will be even more challenging than previously anticipated
throughout calendar 2009.  The recessionary economy and impaired
mortgage markets are, of course, contributing to the housing
shortfall.  The Outlook also reflects negative trends in HOV's
operating margins, further deterioration in credit metrics
(especially interest coverage and debt/EBITDA ratios) and erosion
in tangible net worth from non-cash real estate charges.  However,
the company's liquidity position provides a buffer and supports
the current ratings.  Fitch notes there is potential for lower
cash flow from operations next year relative to fiscal 2008.

HOV generated $652.9 million of cash from operations during the
latest twelve months from July 31, 2008 and ended the quarter with
$677.2 million of cash on the balance sheet.  The company expects
to generate additional cash during its fourth quarter (ending
Oct. 31, 2008) and end the year with cash of approximately
$800 million.  HOV has no major debt maturities until 2010, when
$100 million of senior subordinated notes become due.

Most recently, HOV issued an aggregate principal amount of
$29.3 million of 18% senior secured notes (third-priority lien)
due 2017 in exchange for certain of the company's senior unsecured
notes in a private exchange offer.  The senior unsecured notes
exchanged in the transaction totaled $71.4 million.  The debt
exchange was an opportunistic transaction for HOV that allowed the
company to reduce debt by approximately $42.1 million and extend
the maturity of $29.3 million of current debt to 2017.

Future ratings and Outlooks will be influenced by the economy and
broad housing market trends as well as company-specific activity,
such as land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new-order
activity, debt levels and free cash flow trends and uses.  The
possibility of the housing downturn continuing longer and becoming
deeper than currently anticipated could have broad ratings
implications for homebuilders.


HUNTSMAN CORP: Drops Merger, Gets $1B from Hexion & Apollo
----------------------------------------------------------
Huntsman Corporation terminated its Merger Agreement with Hexion
Specialty Chemicals, Inc.  In addition, Huntsman reached an
agreement with Hexion, Apollo Management, L.P., and certain of its
affiliates to settle Huntsman's claims against Hexion, Apollo and
its affiliates arising in connection with Huntsman's Merger
Agreement with Hexion.  Payments to be made to Huntsman under the
Settlement Agreement total $1 billion.

In addition to the $325 million break-up fee to be paid as
provided in the Merger Agreement and which Hexion expects will be
funded by Credit Suisse and Deutsche Bank under an existing
commitment, certain affiliates of Apollo will make cash payments
to Huntsman under the Settlement Agreement totalling
$425 million.  Certain affiliates of Apollo also will pay Huntsman
an additional $250 million in exchange for 10 year convertible
notes issued by Huntsman in that principal amount, which may be
repaid at maturity in cash or common stock at Huntsman's election.

At least $500 million of the payments are to be paid to Huntsman
on or before December 31, 2008, and any remaining payments that
have not been made by that date must be made on or before
March 31, 2009.

The Settlement Agreement also resolves Huntsman's pending claims
against Apollo and its affiliates relating to Huntsman's prior
merger agreement with Basell AF.

In announcing the settlement, Huntsman's President and CEO Peter
R. Huntsman stated, "We are pleased to have reached this agreement
with Hexion and Apollo.  Receipt of these proceeds will enhance
the strength of Huntsman's balance sheet and better position our
company to prosper during the current turbulence in the global
economy.  Additionally, our associates, customers and suppliers
can now put the uncertainty concerning the outcome of the merger
with Hexion behind them."

Leon Black, Chairman of Apollo Global Management, LLC, added, "We
are happy to be resolving this situation in the best interest of
our investors.  It puts to an end the six month disagreement and
distraction between our companies.  As the majority stakeholder in
Hexion and now an investor in Huntsman, we look forward to both
companies traversing this economic cycle and prospering."

The settlement with Hexion, Apollo and its affiliates does not
resolve the claims asserted by Huntsman against the Banks in its
ongoing litigation against the Banks in Montgomery County, Texas.
Huntsman's suit against the Banks includes claims that the banks
conspired with Apollo and tortiously interfered with Huntsman's
prior merger agreement with Basell, as well as with the later
Merger Agreement with Hexion.  A jury trial on those claims
currently is set to begin on May 11, 2009.  As part of the
Settlement Agreement, Apollo and its principals have agreed to
fully cooperate in connection with Huntsman's litigation against
the Banks.

Huntsman noted in a filing with the Securities and Exchange
Commission that, of the $1 billion, certain affiliates of Apollo
have agreed to pay Huntsman $425 million in cash and purchase $250
million of Huntsman's 7% Convertible Senior Notes in that
principal amount.  In addition, Hexion has agreed to pay the
$325 million termination fee as required under the Merger
Agreement.  Apollo and its affiliates have agreed that at least
$500 million of the purchase from and payments to Huntsman will be
paid on or before December 31, 2008.  In addition, Hexion has
agreed to pay to Huntsman the $325 million termination fee as soon
as Hexion LLC receives the proceeds of the Termination Facility,
but in no event later than March 31, 2009.  Any portion of the $1
billion that has not been paid to Huntsman by
December 31, 2008, must be paid to Huntsman on or before March 31,
2009.  The Notes will mature on the 10th anniversary of the date
they are issued.

Jon M. Huntsman, Founder and Executive Chairman of Huntsman
Corporation, commented, "This is a significant settlement for our
company and its shareholders, but we must continue to pursue our
multi-billion dollar Texas case against Credit Suisse and Deutsche
Bank for the harm they have caused.  We remain focused on
preparing for our May jury trial against the Banks."

A full-text copy of the Settlement Agreement and Release, dated
December 14, 2008, among Huntsman Corporation, Jon M. Huntsman,
Peter R. Huntsman, Hexion Specialty Chemicals, Inc., Hexion LLC,
Nimbus Merger Sub, Inc., Craig O. Morrison, Leon Black, Joshua J.
Harris and Apollo Global Management, LLC and certain of its
affiliates, is available at no charge at:

              http://ResearchArchives.com/t/s?3643

A full-text copy of the Letter Agreement, dated December 14, 2008,
among Huntsman Corporation, Jon M. Huntsman, Peter R. Huntsman,
Hexion Specialty Chemicals, Inc., Hexion LLC, Nimbus Merger Sub,
Inc., Craig O. Morrison, Leon Black, Joshua J. Harris and Apollo
Global Management, LLC and certain of its affiliates, is available
at no charge at:

              http://ResearchArchives.com/t/s?3644

Pursuant to the Letter Agreement, Huntsman agreed to pay the
Apollo Parties an amount of cash equal to 20% of the value of cash
and non-cash consideration that is in excess of $500 million that
the company may obtain or receive in settlement in connection with
any claims made by the company against the Banks arising from or
relating to the Merger Agreement, the transactions contemplated
thereby and related matters, including the Texas Action Against
the Banks, after the company first recovers its attorneys' fees,
costs and expenses in making the claim.  In no circumstance will
the aggregate amount of payments owed by the company to the Apollo
parties under the Letter Agreement exceed $425 million.  Moreover,
in the event trial commences in the Texas Action Against the
Banks, any interest on the part of the Apollo Parties will
terminate immediately and the company will not owe any portion of
any subsequent recovery to the Apollo Parties.  The Letter
Agreement and the obligations thereunder terminate if the company
is not paid in full the
$1 billion under the Settlement Agreement before April 1, 2009.

                    About Hexion Specialty

Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://www.hexionchem.com/-- is a producer of thermosetting
resins, or thermosets.  Thermosets are a critical ingredient in
virtually all paints, coatings, glues and other adhesives produced
for consumer or industrial uses.  Hexion Specialty Chemicals is
controlled by an affiliate of Apollo Management L.P.

Hexion Specialty Chemicals Inc.'s balance sheet at Sept. 30, 2008,
showed total assets of $3.8 billion and total liabilities of $5.4
billion, resulting in a shareholders' deficit of
$1.6 billion.

                     About Huntsman

Headquartered in Salt Lake City, Utah, Huntsman Corporation
(NYSE: HUN) -- http://www.huntsman.com/-- is a manufacturer of
differentiated chemical products and inorganic chemical
products.  The company operates in four segments: Polyurethanes,
Materials and Effects, Performance Products and Pigments.  Its
products are used in a range of applications, including those in
the adhesives, aerospace, automotive, construction products,
durable and non-durable consumer products, electronics, medical,
packaging, paints and coatings, power generation, refining,
synthetic fiber, textile chemicals and dye industries.  Its Latin
American operations are in Argentina, Brazil, Chile, Colombia,
Guatemala, Panama and Mexico.

At September 30, 2008, the company's consolidated balance sheet
showed US$8.41 billion in total assets, US$6.64 billion in total
liabilities, US$33.5 million in minority interests, and
US$1.73 billion in total stockholders' equity.

                        *     *     *

As reported by the Troubled Company Reporter on Oct. 3, 2008,
Standard & Poor's Ratings Services said that its ratings on
Huntsman Corp. and Hexion Specialty Chemicals Inc. remain on
CreditWatch with negative implications, where they were placed on
July 5, 2007.  The initial CreditWatch placement followed the
announcement of Hexion's proposed debt-financed acquisition of
Huntsman in a transaction valued at more than US$10 billion,
including assumed debt.

In June 2008, S&P said that its ratings on Huntsman Corp. (BB-
/Watch Neg/--) remain on CreditWatch with negative implications,
where they were placed on July 5, 2007.

As reported in the Troubled Company Reporter on Oct. 6, 2008,
Huntsman Corp. (Huntsman - Ba3 Corporate Family Rating - Rating
Under Review For Downgrade) issued a press release on Sept. 29,
2008 announcing the decision of the Delaware Court of Chancery to
enter judgment in favor of Huntsman denying all declarations
sought by Apollo Management, L.P. and Hexion Specialty Chemicals,
Inc., in their suit requesting that the Court excuse Hexion from
its obligation to consummate the pending transaction.


INDALEX HOLDING: S&P Cuts Rating on Senior Secured Notes to 'CCC-'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Lincolnshire, Illinois-based Indalex Holding Corp. to
'CCC' from 'CCC+'.  The outlook is negative.

At the same time, S&P lowered its rating on its $270 million
senior secured notes due 2014 to 'CCC-' from 'CCC' and kept the
recovery rating at '5', indicating the expectation of modest (10%-
30%) recovery in the event of a payment default.

"The downgrade reflects the continuing deterioration of the
company's liquidity position, and a worsening of market conditions
in the aluminum industry with prices declining to below $0.80 per
pound as a result of weak end markets," said S&P's credit analyst
Sherwin Brandford.

While S&P had expected the company's near term liquidity to
continue to deteriorate due to market weakness, the pace of
decline has been more rapid than expected, with availability on
the company's $200 million asset-based-revolver just $37 million
as of Sept. 30, 2008.  The company improved its liquidity modestly
with the infusion of a $15 million term loan from an affiliate of
its equity sponsor, Sun Capital Partners Inc., but S&P continues
to expect the company's liquidity to remain very tight and
potentially deteriorate further given market conditions.

The ratings reflect the company's exposure to highly cyclical and
competitive markets, thin margins, import concerns, negative free
cash flow, and shrinking liquidity.

S&P expects challenging market conditions and continued lower
volumes during the next few quarters to keep on constraining
Indalex's liquidity, and could cause the company to breach its
covenants, potentially leading to another downgrade.
Specifically, there is a high likelihood that the company's
liquidity will fall below the minimum level required under its
credit agreement and, should this happen, Indalex will fail its
fixed charge coverage test.


JOSEPH MALONE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Joseph Scott Malone
        Tamara Malone
        1551 E. Lynwood St.
        Mesa, AZ 85203

Bankruptcy Case No.: 08-18058

Chapter 11 Petition Date: December 12, 2008

Court: District of Arizona (Phoenix)

Judge: James M. Marlar

Debtor's Counsel: Keith M. Knowlton, Esq.
                  keithknowlton@msn.com
                  Keith M. Knowlton L.L.C.
                  1630 S. Stapley, #231
                  Mesa, AZ 85204
                  Tel: (480) 755-1777
                  Fax: (480) 755-8286

Estimated Assets: $1 million to $10 million

Estimated Debts: $500 million to $1 billion

The Debtor did not file a list of 20 largest unsecured creditors.


KB HOME: Fitch Downgrades Issuer Default Rating to 'BB-'
--------------------------------------------------------
Fitch Ratings has downgraded KB Home's Issuer Default Rating and
outstanding debt ratings:

  -- IDR to 'BB-' from 'BB+';
  -- Senior unsecured to 'BB-' from 'BB+';
  -- Unsecured bank credit facility to 'BB-' from 'BB+';
  -- Senior subordinated debt to 'B' from 'BB-'.

The Rating Outlook remains Negative.

The downgrade reflects the current very difficult housing
environment and Fitch expectations that housing activity will be
even more challenging than previously anticipated throughout
calendar 2009.  The recessionary economy and impaired mortgage
markets are, of course, contributing to the housing shortfall.
The Outlook also reflects negative trends in KBH's operating
margins, further deterioration in credit metrics (especially
interest coverage and debt/EBITDA ratios) and erosion in tangible
net worth from non-cash real estate charges.  However, KBH's
liquidity position provides a buffer and supports the current
ratings.  Fitch believes that there is potential for lower cash
flow from operations next year relative to Fiscal 2008.

Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as land
and development spending, general inventory levels, speculative
inventory activity (including the impact of high cancellation
rates on such activity), gross and net new order activity, debt
levels and free cash flow trends and uses.

The ratings reflect KBH's execution of its business model, as well
as the company's primary focus on entry-level and first-step
trade-up housing (the deepest segments of the market), its
conservative building practices, and effective utilization of
return on invested capital criteria as a key element of its
operating model.  In recent years KBH has improved its capital
structure and increased its geographic diversity and has better
positioned itself to withstand this meaningful housing downturn.
Fitch also has taken note of KB Home's role as an active
consolidator within the industry.

KBH maintains a three-year supply of lots (based on last 12 months
deliveries), 70.2% of which are owned and the balance controlled
through options.  (The options share of total lots controlled is
down sharply over the past two years as the company has written
off substantial numbers of options.)

As the housing cycle continues to contract, creditors should
benefit from KB Home's solid financial flexibility supported by
cash and equivalents of $942.5 million and $614.2 million
available under its $800 million unsecured credit facility (net of
$185.8 million of letters of credit) as of Aug. 31, 2008.  In
addition, liquid, primarily pre-sold work-in-process, and finished
inventory totaling $2.56 billion provides comfortable coverage for
construction debt. KBH has $200 million of senior subordinated
notes coming due on December 15, 2008.  The company does not have
any other major debt maturing until August 2011, when $350 million
of senior notes mature.

As of Aug. 31, 2008, KBH's unconsolidated joint ventures had total
debt of $1.46 billion.  Of the total debt, $2.8 million was
recourse and an additional $220.2 million had limited recourse to
KB Home.  KBH had provided a several guaranty to the lenders of
one of its unconsolidated joint ventures.  At Aug. 31, 2008, this
JV had total outstanding debt of $373.9 million, and, if this
guaranty were enforced, KBH's potential responsibility under the
guaranty would be approximately $182.7 million.  This JV has
received notices from its lender's administrative agent alleging a
number of defaults under the loan agreement.  KBH is currently
exploring resolutions with the lenders and its JV partners.

In August 2008, KBH amended its unsecured revolving credit
facility.  As part of the amendment, the commitments under the
revolver were reduced from $1.3 billion to $800 million.  The
credit facility is also subject to further reductions if the
company's tangible net worth falls below certain thresholds.
Additionally, the TNW covenant was reset to $1 billion (and allows
for the exclusion of up to $721.7 million of deferred tax
valuation allowance) and its leverage and interest coverage
requirements were also modified.  At Aug. 31, 2008, KBH had an
$812 million cushion under its TNW covenant.


KB TOYS: Gets Court's Approval to Pay 10,900 Employees
------------------------------------------------------
KB Toys Inc. obtained permission from the Hon. Kevin Carey of the
United States Bankruptcy Court for the District of Delaware to
maintain paying its 4,400 full-time and 6,500 holiday employees as
it wind-down 431 stores to raise cash to pay its creditors,
according Steven Church of Bloomberg News.

"It's critical that people continue to work and continue to
maintain their morale," Bloomberg quoted a person with knowledge
of the matter.

The company, Mr. Church says, also obtained authority from the
Court to rely on its cash flow to liquidate its business and pay
for expenses related to the bankruptcy on the interim.

In addition, the Court authorized the company to continue to
honor its gift cards, Bloomberg relates.

                          About KB Toys

Headquartered in Pittsfield, Massachusetts, KB Toys, Inc. --
http://www.kbtoys.com-- operates a chain of retail toy stores.
On Jan. 14, 2008, the Debtor and 69 of its affiliates filed for
protection under Chapter 11 of the Bankruptcy Code, which were
administratively consolidated under Case No. 04-10120.  Two of the
200 bankruptcy cases remain open, KB Toys Inc. and KB Toy of
Massachusetts Inc.  In connection with the emergence of KB Toys
from bankruptcy in August 2005, and the subsequent organizational
restructuring, the assets and operations of may of these prior
debtors were transferred among then existing debtor entities and
consolidated with KB Toys Group.  Furthermore, most of the
entities involved were either dissolved or were merged into
surviving entities, and several of them changed their names.  As
a result, nine Debtors and four inactive special purpose units
which are not debtors.

The company and eight of its affiliates filed for Chapter 11 on
December 11, 2008 (Bankr. D. Del. Lead Case No. 08-13269).  Joel
A. Waite, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway,
Stargatt & Taylor LLP, represent the Debtors in their
restructuring efforts.  The Debtors proposed Wilmer Cutler
Pickering Hale and Dorr LLP as their co-counsel, FTI Consulting
Inc. as financial and restructuring advisor, and Epiq Bankruptcy
Solutions LLC as claims and noticing agent.  When the Debtors
filed for protection from their creditors, they listed assets and
debts between $100 million to $500 million each.


KB TOYS: Returns to Bankruptcy Due to Rapid Decline in Sales
------------------------------------------------------------
Bloomberg News' Bill Rochelle reports that KB Toys Inc., together
with eight affiliates, returned to Chapter 11 as comparable-store
sales contracted by 20 percent between Oct. 5 and Dec. 8.

KB Toys, according to Mr. Rochelle's report, decided that
liquidating during the holiday season would be the best outcome
for creditors.  KB intends to close the 431 stores in going-out-of
business sales that will begin Dec. 19.

As reported in last Friday's Troubled Company Reporter, KB Toys
said in court documents that it wants to start with going-
out-of-business sales at hundreds of its stores right away "to
take advantage of the last two weeks of the holiday selling
season."  KB Toys, according to WSJ, has 277 stores located
primarily in shopping malls, along with 40 KB Toy Works stores in
strip malls.  Court documents say that the company runs 114 outlet
stores and 30 temporary "holiday stores."

Bloomberg relates that KB selected a joint venture between Gordon
Brothers Retail Partners LLC and Great American Group LLC to serve
as consultants for the GOB sales.  KB, according to the report,
will pay the expenses, while the liquidators will receive a fee
equal to:

   -- 2% if the proceeds of the liquidation are between 48% and
      52% of retail value.

   -- 2.25% if the recovery exceeds 52%.

   -- no fee if the recovery is less than 48%.

KB has asked the U.S. Bankruptcy Court for the District of
Delaware to hold a hearing by Dec. 18 to approve the GOB sales and
the engagement of the liquidators.

                         About KB Toys

Headquartered in Pittsfield, Massachusetts, KB Toys Inc.
-- http://www.kbtoys.com/-- is a combined mall-based and online
specialty toy retailer.  The company and its affiliates operate a
chain of retail toy stores.

KB first filed for Chapter 11 in 2004 and emerged from bankruptcy
in August 2005.

KB, together with nine affiliates, again filed for Chapter 11 on
Dec. 11, 2008 (Bankr. D. Del., Leasd Case No. 08-13269).  Judge
Kevin. J. Carey handles the case., Joel A. Waite, Esq., and
Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor
LLP, have been tapped as bankruptcy counsel for KB.  In its second
bankruptcy filing, KB listed assets of $241 million against debt
totaling $362 million.


KEY PLASTICS: Financial Woes Cue Chapter 11; Files Prepack Plan
---------------------------------------------------------------
Key Plastics LLC along with its affiliate, Key Plastics Finance
Corp., filed a voluntary petition under Chapter 11 of the United
States Bankruptcy Court for the District of Delaware citing
financial difficulties due to the recent economic downturn in the
automotive industry.

The company said it defaulted under the indenture governing the
11-3/4% senior secured notes due 2013 that resulted in a cross
default under a certain revolving credit facility agreement with
The CIT Group/Business Credit Inc. and Jefferies Finance dated
March 12, 2007.  The company further said that it replaced the
facility with a prepetition term loan of $10 million.

In conjunction with the Chapter 11 filing, the company proposes a
joint Chapter 11 prepackaged plan of reorganization to restructure
its existing equity and debts by conversion of its senior secured
debt into equity or retirement.

Under the plan, each holder of series A unit claims will be paid
equal to $474 per series A unit in cash.  At its option, holders
will be entitled to receive, either:

   -- pro rata share of 65% of the full-diluted new common units
      to be issued by the company post-confirmation, which will be
      subsequently be contributed to the reorganized Finance Corp.
      in turn for an equal percentage of new common stock to be
      issued by the reorganized Finance Corp.; or

   -- cash equal to 16% of the face value of the holder's senior
      notes.

Furthermore, holders of senior notes who elect to receive their
pro rata share of new the company equity in which holders may
subscribe for its pro rata share of no more than 35% of the new
company equity, which will also be subsequently be contributed to
the reorganized Finance Corp. in exchange for an equal percentage
of new Finance Corp. equity.

On the Plan's effective date, 100% of new company equity will be
held by the reorganized Finance Corp. and 100% of new Finance
Corp. equity will be held by former holders of senior notes,
rendering reorganized company as wholly-owned subsidiary of the
reorganized Finance Corp.

According to the company, the plan provides for the payment in
full of allowed (i) administrative expense claims; (ii) priority
tax claims; (iii) claims pursuant to any debt facilities approved
by the Court; (iv) other priority claims; (v) lease rejection
claims; and (vi) general unsecured claims -- including trade
creditor claims.  The plan leaves holders of other secured claims
against the Debtors impaired, the company noted.

The company related that on Nov. 12, 2008, it solicited votes on
the plan, wherein holders of senior notes claims and series A unit
claims voted to accept the plan.

The company said that the plan contemplates the reduction of its
outstanding indebtedness by as much as $121.756 million, which
will provide the company with greater liquidity, better
positioning from an operation standpoint ahead.

In addition, the company said Wayzata Investment Partners LLC will
provide up to $20 million in rights offering to fund the
restructuring, among other things.

The company said it expects that the restructuring will be
completed by January 2009.

Ralph Ralston, President & COO of the company's North American
operations, stated, "In the face of today's economic conditions,
we are pleased to have achieved such strong support for a
consensual restructuring that is beneficial to our employees,
customers, and suppliers by dramatically improving our balance
sheet, eliminating the related debt service obligations, and
enabling continued reinvestment in our products and future
growth."

"This process will give Key Plastics one of the strongest
financial profiles in the industry, and allow us to persevere
through the current industry environment while continuing to
provide exceptional products and services to our customers
worldwide.  We look forward to the continued support of Wayzata
and DDJ and their long-term commitment to the business," Mr.
Ralston said.

The company listed assets and debts between $100 million and $500
million in its filing.  The company owes $1.4 million to BASF
Corporation; $1.4 million to Jing Mei Automotive (USA) Inc.; and
$478,975 to Basilius Tool Company.

Chief financial officer John Will disclosed that KAC Acquisition
Company owns 100% of Key Plastics LLC common interest; Bank One,
NA, owns 11.9% of Key Plastics LLC series A preferred units; and
Eaton Vance Corp. owns 10.3% of Key Plastic LLC series A
preferred.

                         About Key Plastic

Headquartered in Northville, Michigan, Key Plastics LLC --
http://www.keyplastics.com/-- supplies plastic components to the
automotive industry.  The company has 24 manufacturing facilities
located in the United States, Canada, Mexico, Germany, Portugal,
Spain, the Czech Republic, France, Slovakia, Italy and China.
According to Bloomberg News, the company filed for bankruptcy in
March 23, 2000, in Detroit and emerged a year later under the
ownership of private-equity firm Carlyle, Bloomberg says.


KEY PLASTICS: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Key Plastics LLC
        aka Key Plastics Technology, LLC
        21700 Haggerty Road, Suite 100
        Northville, MI 48167

Bankruptcy Case No.: 08-13326

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
Key Plastics Finance Corp.                         08-13324

Related Information: The Debtors supply plastic components to the
                     automotive industry.  The Debtors have 24
                     manufacturing facilities located in the
                     United States, Canada, Mexico, Germany,
                     Portugal, Spain, the Czech Republic, France,
                     Slovakia, Italy and China.

                     According to Bloomberg News, the company
                     filed for bankruptcy in March 23, 2000, in
                     Detroit and emerged a year later under the
                     ownership of private-equity firm Carlyle,
                     Bloomberg says.

                     See: http://www.keyplastics.com/

Chapter 11 Petition Date: December 15, 2008

Court: District of Delaware (Delaware)

Judge: Mary F. Walrath

Debtors' Counsel: Mark D. Collins, Esq.
                  collins@RLF.com
                  Richards Layton & Finger PA
                  One Rodney Square
                  P.O. Box 551
                  Wilmington, DE 19899
                  Tel: (302) 651-7700
                  Fax: (302) 651-7701

Estimated Assets: $100 million to $500 million

Estimated Debts: $100 million to $500 million

The petition was signed by senior vice president and chief
financial officer John Wilson.

The Debtors' Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
BASF Corporation               trade             $1,412,113
Attn: John Byrd
100 Campus Drive
Florham Park, NJ 07932
Tel: (248) 641-1820
Fax: (248) 641-7370

Jing Mei Automotive            trade             $1,315,844
(USA) Inc.
Attn: Bob Boyd
10415 United Parkway
Schiller Parkway, IL 60176
Tel: (248) 703-7270
Fax: (847) 617-5311

Basilius Tool Company          trade             $478,975
Attn: Scott Basilius
4338 South Avenue
Toledo, OH 43615
Tel: (419) 536-5810
Fax: (419) 536-0391

Phillips Sumika                trade             $353,913

Rhodia Polyamide Corp.         trade             $167,065

Zatkoff Seals and Packings     trade             $125,787

Polyone Corporation            trade             $124,496

Rhetech Inc.                   trade             $124,331

Perot Systems                  trade             $109,810

Tek-Cast Inc.                  trade             $104,673

BDO Seidman LLP                trade             $101,282

DTE Energy                     trade             $90,377

Commercial Spring and          trade             $83,568
Tool

Deco' Plate                    trade             $72,123

Dynacast Canada                trade             $68,849

Dixon Tool Co. Ltd.            trade             $68,800

Luck Marr                      trade             $63,032

Madison Tool Inc.              trade             $63,023

Packaging Specialties          trade             $57,400

Specialty Industries Inc.      trade             $49,841

Elite Welding & Fabricating    trade             $49,235

Rich Industries Inc.           trade             $47,689

American Electric Power        trade             $43,208

LyondellBasell Advanced        trade             $41,702

Epic Equipment & Engineering   trade             $41,400

Lightning Components & Design  trade             $39,385

Washington Penn Plastic Co.    trade             $38,759

JTEKT Automotive               trade             $38,397

Fastco Industries Inc.         trade             $37,075

Foster Electric America        trade             $35,120


KRISPY KREME: Posts $5.9MM Net Loss in Quarter Ended November 2
---------------------------------------------------------------
Krispy Kreme Doughnuts Inc. posted a net loss of $5.9 million for
the three months ended November 2, 2008, compared to a net loss of
$798,000 for the three months ended October 28, 2007.

Krispy Kreme also expects that franchisees will close more stores
in the future, and that the number of those closures may be
significant.  Franchisees opened 96 stores and closed 30 stores in
the first nine months of fiscal 2009, including 37 and 19 stores,
respectively, in the third quarter.

               Three Months Ended November 2008

Systemwide sales for the third quarter of fiscal 2009 decreased
approximately 1.0% compared to the third quarter of fiscal 2008,
reflecting an 19.0% decrease in average weekly sales per store,
partially offset by a 22.1% increase in store operating weeks.
The systemwide sales decrease reflects an 11.1% decrease in
Company Stores sales from the prior year quarter, partially offset
by a 5.5% increase in franchise store sales.  The total number of
factory stores at the end of the third quarter of fiscal 2009 was
284, consisting of 86 Company stores and 198 franchise stores.
Satellite stores made up 44% of the total systemwide store count
as of November 2, 2008, compared to 31% at October 28, 2007.
Systemwide average weekly sales per store are lower than Company
average weekly sales per store principally because satellite
stores, which generally have lower average weekly sales than
factory stores, are operated almost exclusively by franchisees.
In addition, the increasing percentage of total stores which are
satellite stores has the effect of reducing the overall systemwide
average weekly sales per store.  On a same store basis, systemwide
on-premises sales decreased 11.8% in the third quarter of fiscal
2009 compared to the third quarter of fiscal 2008.

Revenues

Total revenues decreased 8.7% to $94.3 million for the three
months ended November 2, 2008, from $103.4 million for the three
months ended October 28, 2007.  This decrease was comprised of an
11.1% decrease in Company Stores revenues to $64.7 million, a
12.6% increase in Franchise revenues to $6.4 million, and a 6.6%
decrease in KK Supply Chain revenues to $23.2 million.

Direct Operating Expenses

Direct operating expenses, which exclude depreciation and
amortization expense, were 92.4% of revenues in the third quarter
of fiscal 2009 compared to 88.0% of revenues in the third quarter
of fiscal 2008.

General and Administrative Expenses

General and administrative expenses increased to $5.8 million, or
6.2% of total revenues, in the third quarter of fiscal 2009 from
$5.7 million, or 5.5% of total revenues, in the third quarter of
fiscal 2008.  The increase in general and administrative expenses
as a percentage of total revenues principally reflects the fixed
nature of many of these expenses on a lower revenue base.  General
and administrative expenses include professional fees and expenses
related to the investigations and securities litigation to the
consolidated financial statements included elsewhere herein,
totaling approximately $160,000 in the third quarter of both
fiscal 2009 and fiscal 2008.  Such professional fees and expenses
include amounts advanced to certain former officers of the company
pursuant to the indemnification obligations.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased to $2.1 million,
or 2.2% of total revenues, in the third quarter of fiscal 2009
from $4.9 million, or 4.7% of total revenues, in the third quarter
of fiscal 2008.  The decline in depreciation and amortization
expense is attributable to the reduction in the number of company
factory stores operating in the third quarter of fiscal 2009
compared to the third quarter of fiscal 2008 and to a lower
depreciable base of property and equipment resulting from asset
dispositions and impairment writedowns.  Additionally,
depreciation and amortization expense decreased in the third
quarter of fiscal 2009 compared to the third quarter of fiscal
2008 as a result of the company's divestiture in January 2008 of
its manufacturing and distribution facility in Effingham,
Illinois.

Interest Income

Interest income decreased to $65,000 in the third quarter of
fiscal 2009 from $379,000 in the third quarter of fiscal 2008
primarily due to lower short-term interest rates.

Interest Expense

Interest expense increased to $3.0 million in the third quarter of
fiscal 2009 from $2.3 million in the third quarter of fiscal 2008.
Interest accruing on outstanding indebtedness was lower in the
third quarter of fiscal 2009 than in the third quarter of fiscal
2008 principally resulting from the reduction in outstanding debt
since the third quarter of fiscal 2008.  This lower interest on
outstanding indebtedness was largely offset by higher lender
margin resulting from the amendments to the company's 2007 Secured
Credit Facilities.

Interest expense for the third quarter of fiscal 2009 reflects a
non-cash charge of $582,000 resulting from marking to market the
company's liabilities related to interest rate derivatives.  As
more fully described in Note 5 to the consolidated financial
statements appearing elsewhere herein, effective April 9, 2008,
the company discontinued hedge accounting for these derivatives as
a result of amendments to its credit facilities.  As a consequence
of the discontinuance of hedge accounting, changes in the fair
value of the derivative contracts subsequent to April 8, 2008, are
reflected in earnings as they occur.  Amounts included in
accumulated other comprehensive income related to changes in the
fair value of the derivative contracts for periods prior to April
9, 2008, are being charged to earnings through April 2010 when the
underlying hedged transactions (interest expense on long-term
debt) affect earnings.  As of November 2, 2008, the fair value of
the derivative liability was approximately $1.6 million, which is
included in accrued liabilities in the accompanying consolidated
balance sheet.  Accumulated other comprehensive income as of
November 2, 2008, includes an accumulated loss related to these
derivatives of approximately $1.0 million (net of income taxes of
approximately $600,000).  Interest expense for the three months
ended November 2, 2008 includes approximately $320,000 of
amortization of this accumulated loss.

Other Non-Operating Income and Expense

Other non-operating income and expense for the three months ended
November 2, 2008, includes a charge of $900,000 to establish a
reserve for collectability risk on a note receivable from an
Equity Method Franchisee.

Other non-operating income and expense for the three months ended
October 28, 2007, includes an impairment charge of approximately
$550,000 to reduce the carrying value of the company's investment
in an Equity Method Franchisee to its estimated fair value, as
well as a gain of approximately $260,000 resulting from the
receipt of additional proceeds from the prior sale of another
Equity Method Franchisee.

Provision for Income Taxes

The provision for income taxes was $404,000 in the third quarter
of fiscal 2009 compared to $376,000 in the third quarter of fiscal
2008.  Each of these amounts includes adjustments to the valuation
allowance for deferred income tax assets to maintain such
allowance at an amount sufficient to reduce the company's
aggregate net deferred income tax assets to zero, as well as a
provision for income taxes estimated to be payable currently.

                  Nine Months Ended November 2008

Systemwide sales for the first nine months of fiscal 2009
increased approximately 1.8% compared to the first nine months of
fiscal 2008, reflecting a 17.5% increase in store operating weeks,
partially offset by a 13.5% decrease in average weekly sales per
store.  The systemwide sales increase reflects a 10.6% increase in
franchise store sales, partially offset by an 11.6% decrease in
Company Stores sales from the first nine months of the prior year.
The total number of factory stores at the end of the first nine
months of fiscal 2009 was 284, consisting of 86 Company stores and
198 franchise stores. Satellite stores made up 44% of the total
systemwide store count as of November 2, 2008, compared to 31% at
October 28, 2007.  On a same store basis, systemwide on-premises
sales decreased 8.3% in the first nine months of fiscal 2009
compared to the first nine months of fiscal 2008.

Revenues

Total revenues decreased 8.2% to $292.2 million for the nine
months ended November 2, 2008, from $318.4 million for the nine
months ended October 28, 2007.  This decrease was comprised of an
11.6% decrease in Company Stores revenues to $202.0 million, a
23.8% increase in Franchise revenues to $19.5 million, and a 4.5%
decrease in KK Supply Chain revenues to $70.7 million.

Direct Operating Expenses

Direct operating expenses, which exclude depreciation and
amortization expense, were 90.7% of revenues in the first nine
months of fiscal 2009 compared to 89.0% of revenues in the first
nine months of fiscal 2008.

General and Administrative Expenses

General and administrative expenses decreased to $17.4 million, or
6.0% of total revenues, in the first nine months of fiscal 2009
from $19.4 million, or 6.1% of total revenues, in the first nine
months of fiscal 2008.  The decrease in general and administrative
expenses reflects a decrease in share-based compensation expense
of approximately $1.4 million due principally to executive officer
turnover resulting in the forfeiture of stock and option awards,
and an out of period credit of approximately $600,000 recorded in
the second quarter of fiscal 2009 related to the company's self-
insured worker's compensation program.  In addition, the decrease
in general and administrative expenses reflects a net decrease in
professional fees of approximately $1.2 million.  The decrease in
professional fees reflects the remediation of material weaknesses
in internal control over financial reporting and the resulting
reduction in consulting fees, reduced use of consultants
generally, and lower outside legal fees.  The net reduction in
professional fees reflects an increase in professional fees and
expenses related to the investigations and securities litigation
to the consolidated financial statements included elsewhere
herein, which totaled approximately $1.1 million in the first nine
months of fiscal 2009 compared to $1.0 million in the first nine
months of fiscal 2008.  Such professional fees and expenses
include amounts advanced to certain former officers of the company
pursuant to the indemnification obligations.  These decreases in
general and administrative expenses were partially offset by a
charge of approximately $600,000 for vacation and other time off
pay resulting from policy changes to enhance these employee
benefits.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased to $6.6 million,
or 2.3% of total revenues, for the first nine months of fiscal
2009 from $13.6 million, or 4.3% of total revenues, for the first
nine months of fiscal 2008.  The decline in depreciation and
amortization expense is attributable principally to the reduction
in the number of company factory stores operating in the first
nine months of fiscal 2009 compared to the first nine months of
fiscal 2008 and to a lower depreciable base of property and
equipment resulting from asset dispositions and impairment
writedowns.

Interest Income

Interest income decreased to $287,000 in the first nine months of
fiscal 2009 from $1.2 million in the first nine months of fiscal
2008 primarily due to lower short term interest rates.

Interest Expense

Interest expense decreased to $7.3 million in the first nine
months of fiscal 2009 from $7.4 million in the first nine months
of fiscal 2008.  Interest accruing on outstanding indebtedness was
lower in the first nine months of fiscal 2009 than in the first
nine months of fiscal 2008 principally because of the reduction in
outstanding debt since the first quarter of fiscal 2008.  This
lower interest on outstanding indebtedness was largely offset by
higher lender margin on fees resulting from the amendments to the
company's 2007 Secured Credit Facilities.

In the first nine months of fiscal 2009, the company charged to
interest expense approximately $260,000 of fees and expenses
associated with the amendments to the company's credit facilities,
and wrote off to interest expense approximately $290,000 of
unamortized debt issuance costs associated with the reduction in
the size of the company's revolving credit facility from $50
million to $30 million.

Loss on Extinguishment of Debt

During the first nine months of fiscal 2008, the company closed
the 2007 Secured Credit Facilities and used the proceeds to retire
other indebtedness.  The company recorded a loss on extinguishment
of debt of approximately $9.6 million, consisting of a $4.1
million prepayment fee related to the other indebtedness and a
$5.5 million write-off of unamortized deferred financing costs
related to that debt.

Equity in Losses of Equity Method Franchisees

Equity in losses of equity method franchisees totaled $685,000 in
the first nine months of fiscal 2009 compared to $695,000 for the
first nine months of fiscal 2008.  This caption represents the
company's share of operating results of unconsolidated franchisees
which develop and operate Krispy Kreme stores.

Other Non-Operating Income and Expense

Other non-operating income and expense in the first nine months of
fiscal 2009 includes a non-cash gain of $931,000 on the disposal
of an investment in an Equity Method Franchisee, largely offset by
a $900,000 charge for collectability risk on a note receivable
from another Equity Method Franchisee.

Other non-operating income and expense for the first nine months
of fiscal 2008 includes an impairment charge of approximately
$550,000 to reduce the carrying value of the company's investment
in an Equity Method Franchisee to its estimated fair value,
partially offset by a gain of approximately $260,000 resulting
from the receipt of additional proceeds from the prior sale of
another Equity Method Franchisee.

Net Loss

The company reported a net loss of $3.8 million for the nine
months ended November 2, 2008, compared to a net loss of
$35.2 million for the nine months ended October 28, 2007.

                  KRISPY KREME DOUGHNUTS, INC.
                   Consolidated Balance Sheet  
                          (Unaudited)      

                              Nov. 2,                 Feb. 3,
                          2008                    2008
                                      (In thousands)

ASSETS        
CURRENT ASSETS:        

Cash and cash
Equivalents                $   32,175                $ 24,735
Receivables                    21,289                  22,991

Accounts and notes
receivable - equity
method franchisees              1,017                   2,637
        
Inventories                    17,865                  19,987

Deferred income taxes              83                      83

Other current assets            5,699                   5,647

Total current assets           78,128                  76,080

Property and equipment         86,762                  90,996

Investments in equity
method franchisees              1,563                   1,950

Goodwill and other
intangible assets              23,856                  23,856

Other assets                    9,831                   9,469

Total assets              $   200,140               $ 202,351

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Current maturities of
long-term debt            $     1,480               $   1,557

Accounts payable                8,289                   5,712

Accrued liabilities            31,270                  35,949

Total current liabilities      41,039                  43,218

Long-term debt, less
current maturities             73,694                  75,156

Deferred income taxes              83                      83

Other long-term
Obligations                    26,725                  27,270

Commitments and contingencies
   
SHAREHOLDERS' EQUITY:

Preferred stock, no
par value                          -                        -

Common stock, no par
Value                        360,912                  355,615

Accumulated other
comprehensive income             517                       81

Accumulated deficit         (302,830)                (299,072)

Total shareholders'
Equity                        58,599                   56,624

Total liabilities and
Shareholders' equity     $   200,140              $   202,351

                         About Krispy Kreme

Headquartered in Winston-Salem, North Carolina, Krispy Kreme
Doughnuts Inc. (NYSE: KKD) -- http://www.KrispyKreme.com/--
is a retailer and wholesaler of doughnuts.  The company's
principal business, which began in 1937, is owning and franchising
Krispy Kreme doughnut stores where over 20 varieties of doughnuts
are made, sold and distributed and where a broad array of coffees
and other beverages are offered.

As of Aug. 3, 2008, there were 494 Krispy Kreme stores operated
systemwide in the United States, Australia, Canada, Hong Kong,
Indonesia, Japan, Kuwait, Mexico, the Philippines, Puerto Rico,
Qatar, Saudi Arabia, South Korea, the United Arab Emirates and the
United Kingdom, of which 100 were owned by the company and 394
were owned by franchisees. Of the 494 stores, 286 were factory
stores and 208 were satellites; 234 stores were located in the
United States and 260 were located in other countries.

                          *     *     *

Standard & Poor's placed Krispy Kreme Doughnuts Inc.'s long term
foreign and local issuer credit ratings at 'B-' in September 2007.
The ratings still hold to date with a negative outlook.


LANDAMERICA FINANCIAL: Amends Stock Buy Agreement W/ Fidelity
-------------------------------------------------------------
Fidelity National Financial, Inc., reported the signing of an
amended stock purchase agreement with LandAmerica Financial Group,
Inc., pursuant to which FNF will acquire LFG's two principal title
insurance underwriters, Commonwealth Land Title Insurance Company
and Lawyers Title Insurance Corporation, as well as United Capital
Title Insurance Company.

The total purchase price for Commonwealth and Lawyers is
approximately $282 million.  Chicago Title Insurance Company and
Fidelity National Title Insurance Company will pay a total of
approximately $135 million in cash to LFG.  Additionally, FNF will
pay LFG a total consideration of approximately $147 million
consisting of $47 million in cash, a $50 million subordinated note
due in 2013, with interest at the 5-year treasury rate at closing
plus 1% and approximately $50 million in FNF common stock valued
at no less than $14.00 per share.

The agreement calls for Fidelity National Title's cash purchase of
United for statutory book value at closing.  United Capital's
statutory book value was approximately $16 million as of
Sept. 30, 2008.  The agreement is subject to certain closing
conditions and regulatory approvals, including the entry of final
approved orders by the Chapter 11 court, Hart Scott Rodino
approval and the receipt of Form A approvals from applicable state
insurance regulators.  The stock purchase agreement is subject to
termination by FNF if the closing of Commonwealth and Lawyers does
not take place on or before Dec. 22, 2008.  The United Capital
purchase is expected to close in the first quarter of 2009.

                     About Fidelity National

Fidelity National Financial, Inc. -- http://www.fnf.com--
provides title insurance, specialty insurance, claims management
services, and information services.  FNF is one of the nation's
largest title insurance companies through its title insurance
underwriters -- Fidelity National Title, Chicago Title, Ticor
Title, Security Union Title and Alamo Title -- that issue
approximately 27 percent of all title insurance policies in the
United States.  FNF also provides flood insurance, personal lines
insurance and home warranty insurance through its specialty
insurance business.  FNF also is a leading provider of outsourced
claims management services to large corporate and public sector
entities through its minority-owned subsidiary, Sedgwick CMS.  FNF
is also a leading information services company in the human
resource, retail and transportation markets through another
minority-owned subsidiary, Ceridian Corporation.

                    About LandAmerica Financial

LandAmerica Financial Group, Inc. is a leading provider of real
estate transaction services with offices nationwide and a vast
network of active agents. LandAmerica serves its agent,
residential, commercial and lender customers throughout the
United States, Mexico, Canada, the Caribbean, Latin America,
Europe and Asia.

LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E. D. Virginia, Lead Case No. 08-35994).
Dion W. Hayes, Esq., and John H. Maddock III, Esq., at
McGuireWoods LLP, are the Debtors' bankruptcy counsel.

In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.  (LandAmerica Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


LANDSBANKI ISLAND: Luxembourg Bank Unit to Be Liquidated
--------------------------------------------------------
Stephanie Bodoni of Bloomberg News reports that Luxembourg court
ordered to liquidate Landsbanki Luxembourg SA, unit of Landsbanki
Island hf.

Luxembourg's financial regulators, Mr. Bodoni says, said in a
statement that the order follows the bank's request two months ago
for a suspension of payments.

The Commission de Surveillance du Secteur Financier took control
of the Luxembourg unit on Oct. 8, 2008, Mr. Bodoni says.

Headquartered in Reykjavik, Iceland, Landsbanki Islands hf. --
http://www.landsbanki.is/-- is a financial institution.  The Bank
filed for Chapter 15 protection on Dec. 9, 2008 (Bankr. S.D. N.Y.
Case No.: 08-14921).  Gary S. Lee, Esq., at Morrison & Foerster
LLP, represents the Debtor.  When it filed for protection from its
creditors, it listed assets and debts of more than $1 billion
each.


LEAR CORPORATION: Moody's Lowers Corporate Family Rating to 'B3'
----------------------------------------------------------------
Moody's Investors Service lowered the Corporate Family and
Probability of Default ratings of Lear Corporation, to B3 from B2.
In a related action, the rating of the senior secured term loan
was lowered to B2 from B1.  The rating on the senior unsecured
notes was affirmed at B3.  The ratings remain on review for
further possible downgrade.

The lowering of Lear's Corporate Family Rating to B3 reflects
sustained lower North American production levels at the Detroit-3
automobile manufacturers and the likelihood of further production
declines going into 2009.  Lower production volumes by European
automobile manufactures are also expected to continue into 2009.

The erosion of demand has resulted in sharply weaker earnings and
cash flow at Lear, and absent a clear view of potential financial
performance in 2008, the company has withdrawn its guidance.
While Lear's financial metrics for the LTM period ending 9/30/08
included EBIT/Interest of 2.6x and debt/EBITDA of 3.4x (calculated
using Moody's standard adjustments), the trend in performance
through the year has weakened, and for the most recent quarter the
company reported an operating loss.  Lear has taken initiatives to
reduce operating costs and improve efficiency, but with further
production cuts at automotive OEM's the prospects for near term
stabilization of operating performance seem limited.  Lear also
has significant operating exposure to the Detroit-3 auto makers,
and potential financial restructurings or bankruptcy filings by
one or more of those companies could create further operating
disruptions for the company.

Moody's review will assess the expected deterioration in Lear's
credit metrics over the near term resulting from North American
and European production pressures, and the eroded financial
condition of the North American operations of the Detroit-3.
Moody's will also consider the fact that while Lear has
successfully implemented restructuring programs in the past, the
current industry environment continues to evolve, posing
additional execution risk.

Lear's Speculative Grade Liquidity rating of SGL-3 indicates
adequate liquidity over the next twelve months.  At September 27,
2008, Lear's principal liquidity sources included cash balances of
approximately $523 million, most of the cash is located
internationally.  In addition, the company's has a Euro 315
million factoring facility which expires in April 2011
($233 million was outstanding at September 27, 2008) and a
$1.29 billion revolving credit facility.  Approximately
$822 million of the revolving credit facility matures in January
2012; while approximately $468 million is due in March 2010.  In
October 2008, the company drew $400 million under the revolving
credit facilities to protect against credit market disruptions.
There are also about $61 million of letters of credit outstanding.
Lear currently has ample room under the credit facility's
covenants with leverage and interest ratios of 2.54 times and 4.07
times compared to the covenant thresholds of 3.5 times and 2.75
times, respectively.

However, the combination of current industry OEM production
pressures, which are expected to continue into 2009, and the
tightening of these covenants over the near-term are expected to
reduce the company's covenant cushions.  The bank debt is secured
by the capital stock of all the company's domestic subsidiaries
and a portion of the first tier foreign subsidiaries, and certain
domestic assets subject to the 10% lien limitation within the
company's bond indentures.  Above these levels collateral must be
shared with the bonds.  Moody's expects Lear's ability to generate
positive free cash flow over the next twelve months to be
challenged by the current industry environment.

Ratings Lowered:

  -- Corporate Family Rating, to B3 from B2

  -- Probability of Default, to B3 from B2

  -- Senior Secured Term Loan, to B2 (LGD3, 42%) from B1 (LGD3,
     42%)

Ratings Affirmed:

  -- Senior Unsecured Notes, B3 (LGD4, 58%)

  -- SGL-3 Speculative Grade Liquidity Rating

The last rating action was on October 14, 2008 when Lear's
Corporate Family Rating was affirmed and the Outlook changed to
Negative.

Lear Corporation, headquartered in Southfield, Michigan, is
focused on providing complete seat systems, electrical
distribution systems and various electronic products to major
automotive manufacturers across the world.  The company had
revenue of $16.0 billion in 2007 and employed approximately 91,000
employees in 34 countries.  Following the disposition of its
interior business, Lear expects its ongoing revenues to
approximate $14.0 billion.


LEHMAN BROTHERS: Fitch Withdraws D Long-Term Issuer Default Rating
------------------------------------------------------------------
Fitch Ratings has withdrawn the long-term Issuer Default Rating
and counterparty rating of Lehman Brothers Financial Products Inc.

These ratings were downgraded to 'D' and 'B/RR1', respectively, on
Oct. 6, 2008 following a voluntary bankruptcy filing on Oct. 5,
2008.

The bankruptcy filings of its parent, Lehman Brothers Holdings
Inc. and affiliate Lehman Brothers Special Finance should have
resulted in the transfer of LDFP's derivatives portfolio to its
contingent manager.

These filings did not give counterparties the right to terminate
transactions with LBFP. However, this right became available when
LBFP filed for bankruptcy protection.  A number of counterparties
have since exercised this right.

As a result of the bankruptcy, an administrator has been appointed
and is overseeing the termination or novation of all existing
trades.  Any required distributions will be satisfied with capital
on hand, which has historically exceeded prescribed levels.  The
complete wind-down of the trading portfolio may take several
months to occur. During this time, Fitch does not believe that
sufficient financial and transaction information will be available
to maintain ratings and is now withdrawing
coverage.

These ratings are withdrawn:

Lehman Brothers Financial Products Inc.

--Long-term IDR 'D';
--Counterparty Rating 'B'.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from
this site, at all times.  Fitch's code of conduct,
confidentiality, conflicts of interest, affiliate firewall,
compliance and other relevant policies and procedures
are also available from the 'Code of Conduct' section of this
site.


LEHMAN BROTHERS: Jarden Wants to Oust Lehman Unit as Loan Agent
---------------------------------------------------------------
Bloomberg News' Bill Rochelle reports that consumer products maker
Jarden Corp. has asked the U.S. Bankruptcy Court for the Southern
District of New York to enter an order ousting a Lehman Brothers
Holdings Inc. subsidiary as the administrative agent on its $1.53
billion lending package.  Jarden says Lehman
has failed to make loans when requested.

The Bankruptcy Court will convene a hearing on Jan. 14 to consider
the request.

At the same hearing, the James Giddens, trustee appointed by the
Securities Investor Protection Corp. to liquidate Lehman's
brokerage subsidiary, Lehman Brothers Inc., will ask the
bankruptcy judge for authority to issue summonses to witnesses in
his investigation who don't appear voluntarily, Bloomberg adds.

                    About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States.  For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.  Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity.  Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region.  The firm, through predecessor
entities, was founded in 1850.

Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr.
S.D.N.Y. Case No.: 08-13555).  Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.

Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16
(Case No. 08-13600).  Several other affiliates followed
thereafter.

The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL).  James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI

Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion.  Nomura Holdings Inc., the
largest brokerage house in Japan, on Sept. 22 reached an agreement
to purchased Lehman Brothers Holdings, Inc.'s operations in Europe
and the Middle East less than 24 hours after it reached a deal to
buy Lehman's operations in the Asia Pacific for US$225 million.
Nomura paid only $2 dollars for Lehman's investment banking and
equities businesses in Europe, but agreed to retain most of
Lehman's employees.

             International Operations Collapse

Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration.  Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on Sept. 15, 2008.  The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.  The
two units of Lehman Brothers Holdings, Inc., which has filed for
bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of JPY4
trillion -- US$38 billion).  Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition.  Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.

Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice.  The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis.  A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.

(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).


LENNAR CORPORATION: Fitch Lowers Issuer Default Rating to 'BB+'
---------------------------------------------------------------
Fitch Ratings has downgraded Lennar Corp.'s Issuer Default Ratings
and outstanding debt ratings:

  -- IDR to 'BB+' from 'BBB-';
  -- Senior unsecured to 'BB+' from 'BBB-';
  -- Unsecured bank credit facility to 'BB+' from 'BBB-';
  -- Short Term IDR from 'F3' to 'B';
  -- Commercial Paper from 'F3' to 'B'.

The Rating Outlook remains Negative.

The downgrade reflects the current very difficult housing
environment and Fitch expectations that housing activity will be
even more challenging than previously anticipated throughout
calendar 2009.  The recessionary economy and impaired mortgage
markets are, of course, contributing to the housing shortfall.
The ratings changes also reflect further deterioration in LEN's
credit metrics (especially interest coverage and debt/EBITDA
ratios) and erosion in tangible net worth from non-cash real
estate charges.  However, LEN's liquidity position provides a
buffer and supports the new ratings.  Fitch notes there is
potential for lower cash flow from operations next year relative
to fiscal 2008.

Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as land
and development spending, general inventory levels, speculative
inventory activity (including the impact of high cancellation
rates on such activity), gross and net new order activity, debt
levels and free cash flow trends and uses.

LEN's ratings reflect the company's strong track record over many
decades and through many past homebuilding cycles, management's
sound operating and financial policies, the company's well
positioned, low-basis land holdings in attractive growth markets,
and its capacity to withstand a meaningful housing downturn.
The rating also considers the off-balance sheet financing of its
longer-dated land supply and the concentration of deliveries in
Florida, Texas and California (the three largest state markets in
the country).  Fitch views LEN's partnerships and joint ventures
to be strategically and financially material to the company's
operations.  However, the manageable leverage levels and the
extensive supply of lots in long-term land-constrained markets
held in the partnerships mitigate this risk to some extent.
Furthermore, LEN has reduced its recourse joint venture debt from
$1.8 billion at the end of its 2006 fiscal year to $629 million at
the end of its 2008 third quarter.  LEN has also committed to
further reduce exposure (through quarterly reductions) to recourse
debt related to joint ventures to $275 million through the
maturity of its revolving credit facility in July 2011 and is so
far ahead of schedule.

LEN's liquidity remains healthy and provides flexibility.  As of
Aug. 31, 2008, LEN had $857 million of cash on the balance sheet
and approximately $800 million of unborrowed capacity under its
recently amended $1.1 billion unsecured revolving credit facility.
In November 2008, LEN amended its unsecured revolving credit
facility that, among other things, reduced the total commitment
from $1.5 billion to $1.1 billion, modified the tangible net worth
and leverage requirements, modified certain borrowing base
advances and extended the quarterly reductions in the company's
recourse JV obligations through the maturity date of the credit
facility.  The facility is scheduled to mature in July 2011.

LEN controls roughly a 7.1-year supply of land based on latest 12
months home deliveries, 58.5% of which are owned, 11.3% are
controlled through options, and 30.2% are controlled through joint
ventures.  (The options share of total lots controlled is down
sharply over the past two years as the company has written off
substantial numbers of options.)


LEVEL 3 COMMUNICATIONS: CEO J. Storey Gets President and COO Posts
------------------------------------------------------------------
Level 3 Communications, Inc. board of directors has elected Jeff
K. Storey as the company's president and chief operating officer,
effective Dec. 8, 2008.  Mr. Storey will report to James Q. Crowe,
the company's chief executive officer.  In connection with the
election of Mr. Storey as president, Mr. Crowe will relinquish
that title, but remain the company's chief executive officer.

From December 2005 until May 2008, Mr. Storey, was president -
Leucadia Telecommunications Group of Leucadia National
Corporation, where he directed and managed Leucadia's investments
in telecommunications companies.  Prior to that, beginning in
October 2002 Mr. Storey was president and chief executive officer
of WilTel Communications Group, LLC until its sale to the company
in December 2005.  Prior to this position, Mr. Storey was senior
vice president and chief operations officer, Network for Williams
Communications, Inc., where he had responsibility for all areas of
operations for the company's communications network, including
planning, engineering, field operations, service delivery and
network management.

In addition to receiving base salary, Mr. Storey will receive
awards pursuant to the company's existing outperform stock
appreciation rights program and existing restricted stock unit
program.  Mr. Storey will also participate in the company's
existing discretionary bonus program.  In connection with his
joining the company, Mr. Storey will receive a one time grant of
400,000 restricted stock units, 100% of the restrictions on which
will lapse on the third anniversary of the date of grant.

On Dec. 8, 2008, the company disclosed that it will initiate a
workforce reduction of approximately 450 employees in North
America, approximately 8% of its total employee base.  The
reduction will take place before the end of December 2008 and will
result in a restructuring charge of approximately $12 million to
$15 million in the fourth quarter 2008.  The reductions were made
across multiple levels in the organization and multiple locations
in North America only.

                   About Level 3 Communications

Headquartered in Broomfield, Colorado, Level 3 Communications Inc.
(Nasdaq: LVLT) -- http://www.level3.com/-- is a provider of
fiber-based communications services.  Level 3 offers a portfolio
of metro and long haul services over an end-to-end fiber network,
including transport, data, Internet, content delivery and voice.

Level 3 Communications Inc. posted $4 million in net losses on
$902 million in net revenues for the third quarter ended Sept. 30,
2008, compared with $23 million in net profit on $765 million in
net revenues for same period ended Sept. 30, 2007.

The company posted $19 million in net losses on $2.58 billion in
net revenues for the nine months ended Sept. 30, 2008, compared
with $22 million in net profit on $2.1 billion in net revenues for
same period ended Sept. 30, 2007.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 26, 2008,
Moody's Investors Service downgraded Level 3 Communications,
Inc.'s probability of default rating to Ca from Caa1 in response
to the company's Nov. 17 announcement that it had reached an
agreement to raise $400 million in new convertible subordinated
debt, the proceeds of which, together with cash on hand, will be
used to fund discounted tender offers for three existing
convertible debt issues that mature in 2009 and 2010.


LEVEL 3 COMMUNICATIONS: President and Fairfax Fin. Disclose Stake
-----------------------------------------------------------------
Jeffrey K. Storey, president and COO of Level 3 Communications
Inc. disclosed in a regulatory filing with the Securities and
Exchange Commission that he may be deemed to directly own 400,000
shares of the company's common stock.

In a separate filing, Fairfax Financial Holdings Ltd., 10% owner
of the company, also disclosed that it may be deemed to indirectly
own 139,276,421 shares of the company's common stock.  It also
added that it indirectly owns 29,499,749 shares of 9% Convertible
Senior Discount Notes due 2013.  A full-text copy of Fairfax
Financial's Form 3 filing is available for free at
http://ResearchArchives.com/t/s?3632

Level 3 Communications Inc.'s outstanding shares of common stock,
as of Oct. 31, 2008, were 1,611,053,938.

                   About Level 3 Communications

Headquartered in Broomfield, Colorado, Level 3 Communications Inc.
(Nasdaq: LVLT) -- http://www.level3.com/-- is a provider of
fiber-based communications services.  Level 3 offers a portfolio
of metro and long haul services over an end-to-end fiber network,
including transport, data, Internet, content delivery and voice.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $9.73 billion, total liabilities of $8.93 billion and
stockholders' equity of about $803 million.

For three months ended Sept. 30, 2008, the company reported net
loss of $120.00 million compared to net loss of $174.00 million
for the same period in the previous year.

For nine months ended Sept. 30, 2008, the company reported net
loss of $334.00 million compared to net loss of $1.02 billion for
the same period in the previous year.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 26, 2008,
Moody's Investors Service downgraded Level 3 Communications,
Inc.'s probability of default rating to Ca from Caa1 in response
to the company's Nov. 17 announcement that it had reached an
agreement to raise $400 million in new convertible subordinated
debt, the proceeds of which, together with cash on hand, will be
used to fund discounted tender offers for three existing
convertible debt issues that mature in 2009 and 2010.


LEVEL 3 COMMUNICATIONS: Directors Sell, Purchase Shares of Stock
----------------------------------------------------------------
Walter Scott, Jr., director of Level 3 Communications Inc.,
disclosed in a filing with the Securities and Exchange Commission
that he has sold 1,514,840 shares of the company's common stock
purchase warrant on Dec. 5, 2008.  After the transaction, he said
that he no longer owns any shares of the company's common stock
purchase warrant.

Douglas C. Eby, director of the company, disclosed in a separate
filing with the SEC that he has sold 559,300 shares of the
company's common stock at $0.8114.  After the transaction, he may
be deemed to directly own 93,270 shares of common stock.

Robert E. Julian, a director of the company, also disclosed that
he acquired 3761 shares of 6% Convertible Subordinated Notes due
2010.   After the transaction, Mr. Julian may be deemed to
beneficially own 1,400 shares.

Level 3 Communications Inc.'s outstanding shares of common stock,
as of Oct. 31, 2008, were 1,611,053,938.

                   About Level 3 Communications

Headquartered in Broomfield, Colorado, Level 3 Communications Inc.
(Nasdaq: LVLT) -- http://www.level3.com/-- is a provider of
fiber-based communications services.  Level 3 offers a portfolio
of metro and long haul services over an end-to-end fiber network,
including transport, data, Internet, content delivery and voice.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $9.73 billion, total liabilities of $8.93 billion and
stockholders' equity of about $803 million.

For three months ended Sept. 30, 2008, the company reported net
loss of $120.00 million compared to net liss of $174.00 million
for the same period in the previous year.

For nine months ended Sept. 30, 2008, the company reported net
loss of $334.00 million compared to net loss of $1.02 billion for
the same period in the previous year.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 26, 2008,
Moody's Investors Service downgraded Level 3 Communications,
Inc.'s probability of default rating to Ca from Caa1 in response
to the company's Nov. 17 announcement that it had reached an
agreement to raise $400 million in new convertible subordinated
debt, the proceeds of which, together with cash on hand, will be
used to fund discounted tender offers for three existing
convertible debt issues that mature in 2009 and 2010.


LINEAR TECHNOLOGY: Capital World Discloses 11% Equity Stake
-----------------------------------------------------------
Capital World Investors disclosed in a regulatory filing with the
Securities and Exchange Commission that it may be deemed to
beneficially own 24,533,900 shares or 11.0% of Linear Technology
Corporation's common stock.

Linear Technology Corporation's shares outstanding at Oct. 24,
2008, $0.001 par value per share were 221,729,262.

A full-text copy of the Schedule 13G is available for free at
http://ResearchArchives.com/t/s?3641

Headquartered in Milpitas, California, Linear Technology
Corporation (NasdaqGS: LLTC) -- http://www.linear.com/-- is a
manufacturer of linear integrated circuits.  Linear Technology
products include high performance amplifiers, comparators, voltage
references, monolithic filters, linear regulators, DC-DC
converters, battery chargers, data converters, communications
interface circuits, RF signal conditioning circuits, uModule(TM)
products, and many other analog functions.  Applications for
Linear Technology' high performance circuits include
telecommunications, cellular telephones, networking products such
as optical switches, notebook and desktop computers, computer
peripherals, video/multimedia, industrial instrumentation,
security monitoring devices, high-end consumer products such as
digital cameras and MP3 players, complex medical devices,
automotive electronics, factory automation, process control, and
military and space systems.

For three months ended Sept. 30, 2008, the company reported net
income of $107,609,000 compared with net income of $91,475,000 for
the same period in the previous year.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $1,664,873,000 and total liabilities of 2,042,809,000,
resulting in a stockholders' deficit of $377,936,000.


LINEAR TECHNOLOGY: Board OKs Amendment of Robert Swanson Deal
-------------------------------------------------------------
The Compensation Committee of the Linear Technology Corporation's
board of directors authorized and approved the amendment of Robert
Swanson's employment agreement for compliance with Section 409A of
the Internal Revenue Code.

Mr. Swanson will continue to serve as executive chairman of the
board.

Section 409A requires that certain nonqualified deferred
compensation arrangements meet certain requirements and imposes an
additional tax and penalties on service providers, including
employees and directors, if a covered arrangement does not comply
with Section 409A.   The amendments approved by the Compensation
Committee generally affect the timing, but not the amount, of
compensation that could be received, the definition of certain
payment triggers and other technical changes.

A full-text copy of the second amended and restated employment
agreement is available for free at
http://ResearchArchives.com/t/s?3640

Headquartered in Milpitas, California, Linear Technology
Corporation (NasdaqGS: LLTC) -- http://www.linear.com/-- is a
manufacturer of linear integrated circuits.  Linear Technology
products include high performance amplifiers, comparators, voltage
references, monolithic filters, linear regulators, DC-DC
converters, battery chargers, data converters, communications
interface circuits, RF signal conditioning circuits, uModule(TM)
products, and many other analog functions.  Applications for
Linear Technology' high performance circuits include
telecommunications, cellular telephones, networking products such
as optical switches, notebook and desktop computers, computer
peripherals, video/multimedia, industrial instrumentation,
security monitoring devices, high-end consumer products such as
digital cameras and MP3 players, complex medical devices,
automotive electronics, factory automation, process control, and
military and space systems.

For three months ended Sept. 30, 2008, the company reported net
income of $107,609,000 compared with net income of $91,475,000 for
the same period in the previous year.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $1,664,873,000 and total liabilities of 2,042,809,000,
resulting in a stockholders' deficit of $377,936,000.


M/I HOMES: Fitch Downgrades Issuer Default Rating to 'B'
--------------------------------------------------------
Fitch Ratings has downgraded M/I Homes, Inc.'s Issuer Default
Ratings and outstanding debt ratings:

  -- IDR to 'B' from 'B+';

  -- Senior unsecured debt to 'B+/RR3' from 'BB-/RR2';

  -- Series A non-cumulative perpetual preferred stock to
     'CCC/RR6' from 'CCC+/RR6'.

The Rating Outlook remains Negative.

The 'RR3' Recovery Rating on MHO's senior unsecured debt,
including its unsecured revolving credit facility, indicates good
recovery prospects for holders of this debt issue.  MHO's exposure
to claims made pursuant to performance bonds and the possibility
that part of these contingent liabilities would have a claim
against the company's assets were considered in determining the
recovery for the unsecured debt holders.  The 'RR6' on MHO's
preferred stock indicates poor recovery prospects in a default
scenario.  Fitch applied a liquidation value analysis for these
RRs.

The downgrade reflects the current very difficult housing
environment and Fitch expectations that housing activity will be
even more challenging than previously anticipated throughout
calendar 2009.  The recessionary economy and impaired mortgage
markets are, of course, contributing to the housing shortfall.
The ratings changes also reflect negative trends in MHO's
operating margins, further deterioration in credit metrics
(especially interest coverage and debt/EBITDA ratios) and erosion
in tangible net worth from non-cash real estate charges.  Fitch
notes there is potential for lower cash flow from operations next
year relative to fiscal 2008.

Future ratings and outlooks will be influenced by broad housing
market trends as well as company specific activity, such as land
and development spending, general inventory levels, speculative
inventory activity (including the impact of high cancellation
rates on such activity), gross and net new order activity, debt
levels and free cash flow trends and uses.

MHO maintains an approximate 4.4 year supply of total lots
controlled, based on trailing 12 months deliveries, and 3.7 years
of owned land.  Total lots controlled were 11,156 at Sept. 30,
2008, 85.4% of which are owned, and the balance is controlled
through options.  Historically, MHO developed about 80% of its
communities from which it sells product, resulting in inventory
turns that were moderately below average as compared to its public
peers.  MHO has been cash flow positive in each of the last eight
quarters and has generated $254.7 million of cash from operations
during the last twelve months.  As a result, MHO has reduced its
debt from $696 million at Sept. 30, 2006 to $215 million at Sept.
30, 2008, a $481 million reduction.  MHO also expects to receive a
tax refund of approximately $40 million in early 2009.

At the end of March 2008, MHO had no borrowings and $141.6 million
of availability under its $250 million revolving credit facility.
In March 2008, MHO amended its revolving credit facility to, among
other things, reduce the aggregate commitment from $500 million to
$250 million and modify the tangible net worth and interest
coverage covenants.  At Sept. 30, 2008, MHO was in compliance with
all of its financial covenants under the revolving credit
facility.  M/I Homes has a $69.5 million cushion under its TNW
requirement, currently its most restrictive covenant.  MHO's
revolving credit facility matures in October 2010.  MHO does not
have any major debt maturities until 2012, when $200 million of
senior notes become due.


MANCHESTER INC: Pre-Emergence Stock Cancelled; Now Privately Owned
------------------------------------------------------------------
All old common stock of Manchester Inc. that was outstanding at
the time it filed for bankruptcy on Feb. 7, 2008, has been
canceled, extinguished and terminated as of June 23, 2008.

The company is now privately owned by Palm Beach Multi-Strategy
Fund LLC.  The Debtor's old common stock does not represent equity
thus the stock has no value and should not be traded.

Manchester nka as Navigator Holdings LLC and its subsidiaries,
emerged from Chapter 11 bankruptcy protection effective as of
June 23, 2008.  Pursuant to the terms of the confirmed Chapter 11
Plan, Manchester's senior lender, Palm Beach Multi-Strategy Fund,
LLC now owns 100% of the new stock in the Company.

The Manchester Chapter 11 Plan embodies a global settlement of all
disputes among Manchester, its former directors and officers, and
Palm Beach.  Pursuant to the Plan, Palm Beach received all of the
equity in the reorganized Company in exchange for a cancellation
of the debt owing to Palm Beach from Manchester.

In addition, Palm Beach contributed a total of $3.7 million to be
used to pay claims and to fund the operations of a litigation
trust, which will pursue claims against third parties and
distribute the proceeds to creditors.  In exchange, Palm Beach,
the Debtors, and their respective officers and directors exchanged
global releases of any and all claims and causes between and among
them.

The company, as restructured, continues to operate as a going
concern, without interruption to operations.  The Company has
repositioned itself in the independent automobile marketplace as
an independent dealer group, providing point of sales financing
through its captive finance company.

                   About Navigator Holdings LLC

Navigator Holdings LLC owns and operates eight independent
automobile dealerships (Navigator Dealer Group LLC) and a captive
finance company (Navigator Acceptance LLC).  The company's
dealerships specialize in selling transportation and utility
vehicles and are located throughout the states of Georgia and
Indiana.  In addition to selling cars and assisting consumers in
obtaining bank financing through normal financing channels,
Navigator Acceptance specializes in providing financing directly
to those consumers with other-than-prime credit.

                       About Manchester

Based in Dallas, Texas, Manchester Inc. (OTCBB: MNCS) --
http://www.manchesterinc.net/-- is in the Buy-Here/Pay-Here
auto business.  Buy-Here/Pay-Here dealerships sell and finance
used cars to individuals with limited credit histories or past
credit problems, generally financing sales contacts ranging from
24 to 48 months.  It operates six automotive sales lots, which
focus on the Buy-Here/Pay-Here segment of the used car market.

The company and its seven affiliates filed for chapter 11
protection on Feb. 7, 2008 (Bankr. N.D. Tex. Case No.08-30703).
Winston & Strawn LLP represents the Debtors in their
restructuring efforts.  Eric A. Liepins, Esq., is the Debtors'
local counsel.  The U.S. Trustee for Region 6 appointed creditors
to serve on an Official Committee of Unsecured Creditors in these
cases.  Powell Goldstein LLP represents the Committee as counsel.
As of the Debtors' bankruptcy filing, it listed total assets of
$131,582,157 and total debts of $123,881,668.


MARVEL ENTERTAINMENT: Settlement Agreement with Perelman Approved
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
approved the settlement agreement between Marvel Entertainment
Group, Inc. and Ronald Perelman, chairman of Revlon, Inc.
Mr. Perelman is the former chairman of the Marvel Entertainment.

Mafco Holdings, now known as MacAndrews & Forbes Holdings Inc.,
which is controlled by Mr. Perelman, will pay $80 million to
resolve a long-running dispute with the trustees of the company.

According to The Deal, the comic book publisher first filed the
suit against Mr. Perelman and his related companies on Oct. 30,
1997, claiming they had breached their fiduciary duty when they
reaped $553.5 million in dividends from three bond sales by
various Marvel parents in 1993 and 1994.

Marvel filed for bankruptcy on Dec. 27, 2006.  The company emerged
from bankruptcy in 1998.  MAFCO Litigation Trust was formed during
Marvel's bankruptcy to pursue the claims of unsecured creditors
and shareholders.

The Trust expects to distribute approximately $50 million to the
beneficiaries of the MAFCO Litigation Trust, which include holders
of Allowed Unsecured Claims and Allowed Equity Interests.  The
holders of the Allowed Equity Interests were shareholders of
Marvel Entertainment Group, Inc., as of Oct. 1, 1998.

Copies of the Settlement Notice, and also the Plan, the MAFCO
Litigation Trust Agreement, the list of Beneficiaries to whom the
Settlement Notice was mailed, and other materials concerning the
Trust and the settlement can be obtained at:

               http://www.mafcosettlement.com/

Beneficiaries who did not receive the settlement notice in the
mail, but whose name appears on the beneficiary list on the Trust
Website, must provide the Trust with their current contact
information in a properly notarized writing in order to receive a
distribution from the Trust.

Beneficiaries who did not receive the settlement notice in the
mail, and whose name does not appear on the beneficiary list, must
provide the Trust with their current contact information and
documentation of their status as a beneficiary in a properly
notarized writing in order to receive a distribution from the
Trust.

Letters are to be sent to this address:

     Friedman Kaplan Sellar & Adelman LLP
     Attn: Daniel B. Rapport
     1633 Broadway, 46th Floor, New York
     NY 10019

                        About Revlon Inc.

Headquartered in New York City, Revlon Inc. (NYSE: REV)
-- http://www.revloninc.com/-- is a worldwide cosmetics, hair
color, beauty tools, fragrances, skincare, anti-
perspirants/deodorants and personal care products company.  The
company's brands, which are sold worldwide, include Revlon(R),
Almay(R), Mitchum(R), Charlie(R), Gatineau(R) and Ultima II(R).

At Sept. 30, 2008, the company's consolidated balance sheet showed
$876.6 million in total assets and $1.88 billion in total
liabilities, resulting in a $999.3 million stockholders' deficit.

                    About Marvel Entertainment

With a library of over 5,000 characters built over more than sixty
years of comic book publishing, Marvel Entertainment, Inc. --
http://www.marvel.com/-- is one of the world's most prominent
character-based entertainment companies.  Marvel utilizes its
character franchises in licensing, entertainment (via Marvel
Studios) and publishing (via Marvel Comics), with emphasis on
feature films, home DVD, consumer products, video games, action
figures and role-playing toys, television and promotions.
Marvel's strategy is to leverage its franchises in a growing array
of opportunities around the world.

Marvel filed for chapter 11 bankruptcy on Dec. 27, 1996 (Bankr. D.
Del.), in order to implement a proposed $525 million
recapitalization.  Marvel's filing did not include Marvel's Panini
subsidiary, which is headquartered in Italy.  In conjunction with
the chapter 11 filing, a bank group led by Chase Manhattan Bank
has agreed to provide Marvel with $100 million of debtor-in-
possession financing.

Marvel's plan of reorganization was consummated on Oct. 18, 1998.
The plan of reorganization for Marvel Entertainment Group was
confirmed on July  31, 1998 by the Court.  Pursuant to the plan,
MEG Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of the company, merged with and into Marvel, with
Marvel continuing as the surviving corporation and as a wholly-
owned subsidiary of the registrant.  As a result of the merger,
the company acquired all of the tangible and intangible assets of
Marvel.


MAXTOR CORP: S&P Cuts Senior Unsecured Rating to 'B'
----------------------------------------------------
Standard & Poor's Ratings Services lowered the senior unsecured
ratings on Seagate Technology HDD Holdings to 'BB-' from 'BB+' and
revised the recovery rating on those issues to '3', indicating
meaningful recovery (50%-70%) in the event of a payment default,
from '4'.  At the same time, S&P lowered the senior unsecured
rating on Maxtor Corp. to 'B' from 'BB+' and revised the recovery
rating to '6', indicating negligible recovery (0-10%) in the event
of a payment default, from '4'.

The action follows the company's announcement that it expects
revenues to decline sequentially in a 14%-24% range in the
December quarter and that operating results will be lower than
previously expected.  "The drop in earnings will pressure the
company's net debt-to-EBITDA measure, which is used in a
performance covenant in the company's $500 million revolving
credit facility," explained S&P's credit analyst Lucy Patricola.
The covenant calls for a minimum net debt to EBITDA of 1.5x, and
while the company currently is comfortably in compliance -- S&P's
estimates the ratio at about 0.4x -- the expected weakness in
December earnings likely will significantly diminish headroom.
"If operating results for the following quarters remain weak,"
added Ms. Patricola, "meeting the covenant could be a challenge."


MERITAGE HOMES: Fitch Affirms Issuer Default Ratings at 'B+'
------------------------------------------------------------
Fitch Ratings has affirmed Meritage Homes Corporation's Issuer
Default Rating and outstanding debt ratings:

  -- IDR at 'B+';
  -- Senior unsecured debt at 'BB-/RR3';
  -- Senior subordinated debt at 'B-/RR6'.

The Rating Outlook remains Negative.

The 'RR3' Recovery Rating (RR) on MTH's senior unsecured debt,
including its unsecured revolving credit facility, indicates good
recovery prospects for holders of this debt issue.  MTH's exposure
to claims made pursuant to performance bonds and joint venture
debt and the possibility that part of these contingent liabilities
would have a claim against the company's assets were considered in
determining the recovery for the unsecured debt holders.  The
'RR6' on MTH's senior subordinated debt indicates poor recovery
prospects in a default scenario.  Fitch applied a liquidation
value analysis for these RRs.

The ratings and Outlook reflect the current very difficult housing
environment and Fitch expectations that housing activity will be
even more challenging than previously anticipated throughout
calendar 2009.  The recessionary economy and impaired mortgage
markets are, of course, contributing to the housing shortfall.
The ratings also reflect negative trends in MTH's operating
margins, further deterioration in credit metrics (especially
interest coverage and debt/EBITDA ratios) and erosion in tangible
net worth from non-cash real estate charges.  Fitch notes there is
potential for lower cash flow from operations next year relative
to fiscal 2008.

Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as land
and development spending, general inventory levels, speculative
inventory activity (including the impact of high cancellation
rates on such activity), gross and net new order activity, debt
levels and free cash flow trends and uses.

Ratings for MTH are based on the company's conservative land
policies and geographic and product line diversity.  MTH has been
an active consolidator in the homebuilding industry which has led
to above average growth during the seven years concluding 2005,
but had kept leverage levels somewhat higher than its peers until
the past few years.  Management has also exhibited an ability to
quickly and successfully integrate its acquisitions.  In any case,
now that MTH has reached current scale there may be relatively
less use of acquisitions going forward and acquisitions are likely
to be smaller relative to the company's current size.

MTH's sales are reasonably dispersed among its 12 metropolitan
markets within six states.  MTH is positioned in six of the ten
largest single family markets in the country (Los Angeles,
Phoenix/Mesa, Dallas/Ft. Worth, Houston, Las Vegas, Orlando).
Typically, about 70-75% of home deliveries are to first and second
time trade up buyers, 10-15% to entry level buyers, 5% are to
luxury home buyers and 5-10% to active adult (retiree) buyers.
MTH employs conservative land and construction strategies.  The
company typically options or purchases land only after necessary
entitlements have been obtained so that development or
construction may begin as market conditions dictate.  MTH
extensively uses lot options.  The use of non-specific performance
rolling options gives MTH the ability to renegotiate price/terms
or void the option which limits down side risk in market downturns
and provides the opportunity to hold land with minimal investment.

As of Sept. 30, 2008, 56% of its lots were controlled through
options - a higher percentage than almost all other public
builders.  Total lots, including those owned, were approximately
20,738 at Sept. 30, 2008.  This represents a 3.3 year supply of
total lots controlled and 1.4 year supply of owned land based on
trailing 12 months deliveries.

MTH has ample liquidity with $338 million of borrowing capacity,
including $119 million of cash, under its $500 million revolving
credit facility which matures in May 2011.  In July 2008, the
company amended its revolving credit facility to, among other
things, reduce the aggregate commitment from $800 million to
$500 and modify the tangible net worth, leverage and interest
coverage requirements.  At Sept. 30, 2008, MTH was in compliance
with all the financial covenants under its revolving credit
facility. Meritage has a $194.6 million cushion under its TNW
requirement, currently its most restrictive covenant.


MERVYN'S LLC: Proposes Feb. 18 as Administrative Claims Bar Date
----------------------------------------------------------------
Mervyn's LLC and its affiliated debtors ask the U.S. Bankruptcy
Court for the District of Delaware to set February 18, 2009, at
6:00 p.m. as bar date for filing proofs of claim for
administrative claims against the Debtors arising during the
postpetition period and approving the Debtors' proposed form and
manner of notice of the postpetition Bar Date.

The Court earlier entered an order establishing bar dates for
filing proofs of claim with respect to prepetition claims.  The
Debtors relate that numerous motions have been filed with respect
to postpetition administrative claims.  According to the Debtors,
they will continue to work on reconciling the asserted
administrative claims with their books and records.

Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware, relates rather than attempting to
address Motions by similarly situated creditors individually, the
Debtors propose to establish a process and initial deadline for
administrative claims so that they may be resolved in an
organized fashion, giving the Debtors time to reconcile the
claims with their books and records.

Proofs of administrative claim must be timely submitted to:

    Mervyns Claims Processing
    c/o Kurtzman Carson Consultants LLC
    2335 Alaska Avenue
    El Segundo, California 90245

A full-text copy of the Proposed Postpetition Bar Date Notice is
available for free at:

  http://bankrupt.com/misc/Mervyns_PostpetitionBarDateNotice.pdf

                        About Mervyn's LLC

Headquartered in the San Francisco Bay Area, Mervyn's LLC --
http://www.mervyns.com/-- provides a mix of top national brands
and exclusive private labels.  Mervyn's has 176 locations in seven
states.  Mervyn's stores have an average of 80,000 retail square
feet, smaller than most other mid-tier retailers and easier to
shop, and are located primarily in regional malls, community
shopping centers, and freestanding sites.

The company and its affiliates filed for Chapter 11 protection on
July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586).  Howard
S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis &
Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi,
Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at
Richards Layton & Finger P.A., represent the Debtors in their
restructuring efforts.  Kurtzman Carson Consultants LLC is the
Debtors' claims agent.  The Debtors' financial advisor is Miller
Buckfire & Co. LLC.  Mervyn's LLC's balance sheet at Aug. 30,
2008, showed $665,493,000 in total assets and $717,160,000 in
total liabilities resulting in a $51,667,000 total stockholders'
deficit.

(Mervyn's Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


MERVYN'S LLC: Seeks to Hire Streambank as IP Consultant
-------------------------------------------------------
Mervny's LLC and its affiliated debtors seek authority from the
U.S. Bankruptcy Court for the District of Delaware to employ
Streambank LLC to provide intellectual property disposition
services nunc pro tunc to November 14, 2008.

The Debtors seek to engage Streambank to:

  (a) assess their intellectual property, including, reviewing
      trademark files, design guidelines, product images, logos
      and art, and supporting assets; and

  (b) actively market their intellectual property and, subject
      to Court approval, conduct a sales process aimed at
      maximizing the value of the assets for the Debtors and its
      creditor constituents.

The Debtors reserve their right to expand the services to be
provided by Streambank.

The Debtors propose to pay Streambank:

  (i) a management fee of $60,000 payable in six monthly
      installments of $10,000, nunc pro tunc to the entry of the
      Court's order; and

(ii) to the extent that the sale of the Debtors' intellectual
      property yields an amount in excess of $60,000, a Seller's
      fee in accordance with this schedule:

        (a) 15% of Gross Consideration for amounts between
            $60,000 and $1,810,000;

        (b) 20% of Gross Consideration for amounts between
            $1,810,000 and $3,560,000; and

        (c) 25% of Gross Consideration for amounts exceeding
            $3,560,000.

The Management Fee, the Debtors note, exclude any out-of-pocket
expenses incurred by Streambank.  The Debtors relate that
Streambank will develop a proposed budget for expenses to be
incurred and may augment the budget with their consent.  The
Debtors will also reimburse Streambank for expenses incurred
subject to the Court's approval.

Gabriel Fried, a principal of Streambank LLC, assures the Court
that his firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code, as modified by Section
1107(b).

                        About Mervyn's LLC

Headquartered in the San Francisco Bay Area, Mervyn's LLC --
http://www.mervyns.com/-- provides a mix of top national brands
and exclusive private labels.  Mervyn's has 176 locations in seven
states.  Mervyn's stores have an average of 80,000 retail square
feet, smaller than most other mid-tier retailers and easier to
shop, and are located primarily in regional malls, community
shopping centers, and freestanding sites.

The company and its affiliates filed for Chapter 11 protection on
July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586).  Howard
S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis &
Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi,
Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at
Richards Layton & Finger P.A., represent the Debtors in their
restructuring efforts.  Kurtzman Carson Consultants LLC is the
Debtors' claims agent.  The Debtors' financial advisor is Miller
Buckfire & Co. LLC.  Mervyn's LLC's balance sheet at Aug. 30,
2008, showed $665,493,000 in total assets and $717,160,000 in
total liabilities resulting in a $51,667,000 total stockholders'
deficit.

(Mervyn's Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


MERVYN'S LCC: Former Employees Sue to Recover ERISA Benefits
------------------------------------------------------------
Michelle Diaz, Patty Pine, and Yasmin Zialcita, on behalf of
themselves and 520 other similarly situated, filed an adversary
complaint against Mervyn's LLC and its affiliated Debtors to
recover damages equivalent to 60 days' pay and ERISA benefits by
reason of the Debtors' violation of their rights under the Worker
Adjustment and Restraining Notification Act.  The plaintiffs filed
the lawsuit as an adversary proceeding before the U.S. Bankruptcy
Court for the District of Delaware.

Ms. Diaz, et al., were employees of the Debtors who were
terminated as a result of a mass layoff.

James E. Huggett, Esq., at Margolis Edelstein, in Wilmington,
Delaware, says the Plaintiffs and other class members constitute
a class within the meaning of Rules 23(a) and (b)(3) of the
Federal Rules of Civil Procedure.  According to Mr. Huggett, the
Debtors failed to pay the Plaintiffs and the other Class members
their wages, salary, commission, bonuses, accrued holiday pay and
accrued vacation for 60 working days following their terminations
and failed to (i) make the pension and 401(k) contributions, (ii)
provide other employees benefits under ERISA and (iii) pay their
medical expenses for 60 calendar days from and after the dates of
their terminations.

Mr. Huggett avers the Class is so numerous as to render joinder
of all members impracticable in that there are some 520 members
of the class.

Moreover, Mr. Huggett notes, the Class also meets the
requirements of Civil Rule 23(b)(1)(B) because adjudications with
respect to individual members of the Class would, as a practical
matter, be dispositive of the interest of the other members of
the Class not parties to the adjudications or substantially
impair or impede their ability to protect their interest.  Mr.
Huggett adds that the Class meets the requirements of Civil Rule
23(b)(3) because the questions of law or fact common to the
members of the class predominate over any questions affecting
only individual members, and that a class action is superior to
other available methods for the fair and efficient adjudication
of the controversy.

Accordingly, Ms. Diaz, et al, ask the Court to:

  (a) allow their administrative claim for unpaid wages,
      salaries, commissions, bonuses, vacation pay and other
      ERISA benefits;

  (b) certify that they constitute a single class;

  (c) appoint Margolis Edelstein as counsel;

  (d) appoint Michelle Diaz, Patty Pine, and Yasmin Zialcita as
      Class Representatives; and

  (e) allow their administrative priority claims for reasonable
      attorneys' fees and the costs and disbursements that they
      incur in prosecuting the action.

                    About Mervyn's LLC

Headquartered in the San Francisco Bay Area, Mervyn's LLC --
http://www.mervyns.com/-- provides a mix of top national brands
and exclusive private labels.  Mervyn's has 176 locations in seven
states.  Mervyn's stores have an average of 80,000 retail square
feet, smaller than most other mid-tier retailers and easier to
shop, and are located primarily in regional malls, community
shopping centers, and freestanding sites.

The company and its affiliates filed for Chapter 11 protection on
July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586).  Howard
S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis &
Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi,
Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at
Richards Layton & Finger P.A., represent the Debtors in their
restructuring efforts.  Kurtzman Carson Consultants LLC is the
Debtors' claims agent.  The Debtors' financial advisor is Miller
Buckfire & Co. LLC.  Mervyn's LLC's balance sheet at Aug. 30,
2008, showed $665,493,000 in total assets and $717,160,000 in
total liabilities resulting in a $51,667,000 total stockholders'
deficit.

(Mervyn's Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


MERYVN'S LLC: New Retailers Acquire 22 Macerich-Owned Sites
-----------------------------------------------------------
Macerich(R) said that 22 of 41 Macerich-owned Mervyns LLC sites
acquired in December 2007 and first Quarter 2008 will go to
retailers Forever 21 or Kohl's, pending approval by the United
States Bankruptcy Court for the District of Delaware overseeing
Mervyns bankruptcy proceedings.  Forever 21 will be taking 12 of
the spaces and Kohl's will be taking 10.

Macerich also said that it closed on a seven-year, $250 million
loan on Washington Square Mall in Portland, Oregon.  The loan has
a fixed interest rate of 6.00%. The transaction generated proceeds
to Macerich above the prior loan of approximately $63 million.

The completion of the Washington Square financing brings the
financing activity completed by Macerich in 2008 to 13
transactions with its pro rata share of those loans totaling
nearly $1.3 billion.  The remaining 2009 maturities, excluding
extensions and loan commitments, are only $525 million.

Forever 21 and Kohl's prevailed in the auction of Mervyns
leaseholds held Dec. 10, 2008, a preliminary step leading to final
court approval of new lessees for Macerich-owned Mervyns sites,
which is expected within the month.  Of the 22 locations, eight
are in Macerich-owned shopping centers.

"The strong interest in these locations from popular and well-
positioned retailers Forever 21 and Kohl's underscores the
inherent value of this retail real estate," said Tony Grossi,
Senior Executive Vice President and COO of Macerich.  "This
response at auction sends a powerful message about the long- term
vibrancy of high-quality shopping center properties, and these
dynamic brands will only add to their financial performance and
shopper appeal."

"We look forward to gaining control of our remaining 19 Mervyns
locations by second quarter 2009, when we will reach out to the
retailers that have expressed strong interest in these attractive
locations," said Mr. Grossi.

Both Forever 21 and Kohl's are pursuing aggressive schedules, with
space build out beginning as early as January; the new stores are
expected to open throughout 2009.

"The current scenario is one we planned for, among others, when we
acquired the Mervyns sites last year," said Mr. Grossi.  "Our
company has an excellent track record of recycling anchor spaces,
as we did successfully with the Federated locations we acquired in
2006.  We've added appreciable value every time."

Forever 21 and Kohl's are strong, growing players in the current
retail landscape.  "This is a smart strategic move for our
company," said Christopher Lee, Senior Vice President, Forever 21.
"The opportunity to assume 12 outstanding, large-format spaces in
key shopping centers in the West works beautifully with our plans
for growth.  In this economic environment, we also are especially
pleased to help preserve retail jobs in these markets. "

Macerich purchased 39 Mervyns sites in December 2007 and two sites
in first quarter 2008 to gain long-term control of well-positioned
retail real estate -- both in its own centers and in other
properties.

Forever 21 is taking space at the following Macerich centers:
Arrowhead Towne Center in Glendale, AZ; Lakewood Center Mall in
Lakewood, CA; Los Cerritos Center in Cerritos, CA; Montebello Town
Center in Montebello, CA; South Towne Center in Sandy, UT; and The
Mall of Victor Valley in Victorville, CA. Locations not in
Macerich-owned centers are: Cottonwood Mall in Albuquerque, NM;
Mall Del Norte in Laredo, TX; Santa Fe Place in Santa Fe, NM;
Tucson Mall in Tucson, AZ; Crossroads Plaza in Calexico, CA;
and Valle Vista Mall in Harlingen, TX.

Kohl's is taking space at the following Macerich centers:
Northgate in San Rafael, CA, and Stonewood Center in Downey, CA.
Locations not in Macerich-owned centers are: Bayshore Mall in
Eureka, CA; Brickyard Plaza in Salt Lake City, UT; Huntington Oaks
Shopping Center in Monrovia, CA; Southland Mall in Hayward, CA;
The Galleria at South Bay in Redondo Beach, CA; the Galleria at
Sunset in Henderson, NV; Whittwood Town Center in Whittier, CA;
and Zinfandel Square in Rancho Cordova, CA.

Additionally, two Mervyns locations located at Macerich centers
but not owned by Macerich, will gain Mervyns replacements --
Kohl's at Capitola Mall in Capitola, CA, and Forever 21 at
Northridge Mall in Salinas, CA.

                          About Mervyn's LLC

Headquartered in the San Francisco Bay Area, Mervyn's LLC --
http://www.mervyns.com/-- provides a mix of top national brands
and exclusive private labels.  Mervyn's has 176 locations in seven
states.  Mervyn's stores have an average of 80,000 retail square
feet, smaller than most other mid-tier retailers and easier to
shop, and are located primarily in regional malls, community
shopping centers, and freestanding sites.

The company and its affiliates filed for Chapter 11 protection on
July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586).  Howard
S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis &
Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi,
Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at
Richards Layton & Finger P.A., represent the Debtors in their
restructuring efforts.  Kurtzman Carson Consultants LLC is the
Debtors' claims agent.  The Debtors' financial advisor is Miller
Buckfire & Co. LLC.  Mervyn's LLC's balance sheet at Aug. 30,
2008, showed $665,493,000 in total assets and $717,160,000 in
total liabilities resulting in a $51,667,000 total stockholders'
deficit.


MESA ROYALTY: NYSE Extends Trustee's 10-K Filing until April 15
---------------------------------------------------------------
New York Stock Exchange, Inc., approved the second request of The
Bank of New York Mellon Trust Company, N.A., the Trustee of Mesa
Royalty Trust, for an additional trading period, giving the Trust
until April 15, 2009, to complete and file the 2007 Form 10-K,
subject to reassessment on an ongoing basis.

On Nov. 26, 2008, The BoNY Mellon submitted to the NYSE a second
request for an additional six-month trading period in light of the
Trust's failure to file its annual report on Form 10-K for the
period ending Dec. 31, 2007.

The Trust failed to file its 2007 Form 10-K timely pursuant to
Section 203.01 (Reporting Financial Information to Shareholders)
of the NYSE's Listed Company Manual and, as a result, is subject
to the procedures under Section 802.01E (SEC Annual Report Timely
Filing Criteria) of the NYSE's Listed Company Manual.  The Trust
was originally granted an additional trading period on Oct. 16,
2008, giving the Trust until Dec. 1, 2008, to complete and file
the 2007 Form 10-K, subject to reassessment on an ongoing basis
and compliance with the milestones and timing outlined in the
request for the additional six-month trading period.

The Trust's units remain listed on the NYSE under the symbol MTR,
but have been assigned a ".LF" indicator by the NYSE to signify
that the Trust is on the "late filer" list.  The Trust will remain
on the late filer list until such time as the Trust is current
with all of its periodic reports filed with the Securities and
Exchange Commission.  Although the Trust intends to cure the
deficiencies and to return to compliance with the NYSE continued
listing requirements, there can be no assurance that it will be
able to do so.  In the event that the Trust is unable to return to
compliance with the NYSE continued listing requirements by
April 15, 2009, the NYSE will move forward with the initiation of
suspension and delisting procedures.

The Trust is awaiting the completion of reserve information by the
Trust's independent reserve engineer, and the Trustee intends to
complete the audited financial statements for the year ended
December 31, 2007 and to file the 2007 Form 10-K soon as possible
after receipt of this information.

                     About Mesa Royalty Trust

Headquartered in Austin, Texas, Mesa Royalty Trust (NYSE:MTR)
was established when Mesa Petroleum Co. conveyed to the Trust a
90% net profits overriding royalty interest in certain producing
oil and gas properties located in the Hugoton field of Kansas, the
San Juan Basin field of New Mexico and Colorado, and the Yellow
Creek field of Wyoming.  The Bank of New York Trust Company, N.A.
is the Trustee of the trust.


MGM MIRAGE: Will Sell Treasure Island Hotel to Ruffin for $775MM
----------------------------------------------------------------
MGM MIRAGE and Ruffin Acquisition, LLC, have entered into an
agreement whereby MGM MIRAGE, through its wholly-owned subsidiary
The Mirage Casino-Hotel, will sell Treasure Island Hotel & Casino
(TI) to Ruffin Acquisition for $775 million.  Ruffin Acquisition,
LLC is wholly owned by Phil Ruffin.

The purchase price is to be paid at closing as:

     -- $500 million in cash; and
     -- $275 million in secured notes bearing interest at 10%,
        with $100 million payable not later than 175 days after
        closing and $175 million payable not later than 24 months
        after closing.

The notes, to be issued by Ruffin Acquisition, will be secured by
the assets of TI and will be senior to any other financing.

The transaction is subject to customary closing conditions
contained in the purchase agreement, including receipt of
necessary regulatory and governmental approvals.  The parties
expect the transaction to close by the end of the second quarter
of 2009.  MGM MIRAGE expects to report a substantial gain on the
sale.

MGM MIRAGE acquired TI as part of the merger between MGM Grand,
Inc. and Mirage Resorts, Incorporated in May 2000.

"We are extremely proud of the accomplishments of Treasure
Island's employees and management team in making it one of the
must-see properties in Las Vegas," said James J. Murren, MGM
MIRAGE Chairperson and CEO.  "We are pleased to have been able to
work with Phil Ruffin, a known and trusted community partner.
This transaction creates value to our stakeholders through
significantly increased liquidity and enhanced financial
flexibility."

TI is located on the Las Vegas Strip and features 2,885 guest
rooms and suites, approximately 90,000 square feet of gaming
space, several fine and casual dining outlets, The Sirens of TI --
the iconic pirate battle attraction, and Mystere, the first
permanent production in Las Vegas by Cirque du Soleil.

"We are very excited to be in a position to acquire such a stellar
property in Treasure Island," said Mr. Ruffin. "The property is in
pristine condition, ideally located in the heart of the Strip and
benefits from a wonderful team of outstanding employees.  We are
financially positioned to close on this transaction once all of
the necessary approvals have been received," Mr. Ruffin added.

           MGM MIRAGE Forms Global Gaming Division

MGM MIRAGE Hospitality, a wholly owned subsidiary of MGM MIRAGE,
reported the creation of MGM MIRAGE Global Gaming Development, a
new division principally focused on MGM MIRAGE's international
gaming expansion into new markets.

Lloyd Nathan has been named to lead MGM MIRAGE Global Gaming
Development as President.

"Lloyd's extensive international gaming development experience,
coupled with his strong legal background, make him highly
qualified to lead our worldwide gaming expansion efforts," said
Gamal Aziz, President and Chief Executive Officer of MGM MIRAGE
Hospitality.

"MGM MIRAGE is one of the world's premier companies in the gaming
industry, with internationally renowned brands.  We believe that
there are significant opportunities for MGM MIRAGE Hospitality to
develop luxury resort properties outside the United States, which
will include gaming in appropriate venues," said Mr. Aziz.

MGM MIRAGE Hospitality's initial international gaming project is
the recently announced MGM Grand Ho Tram in Vietnam, to be owned
and developed by Asian Coast Development Ltd. and managed by MGM
MIRAGE Hospitality.

Mr. Nathan has a significant background in global gaming
development.  He joined the company in 2002 and most recently
served as Executive Vice President and Managing Director of MGM
MIRAGE International, based in Hong Kong.  Prior to joining MGM
MIRAGE, Mr. Nathan had a distinguished career as a practicing
attorney specializing in international transactions and as an
executive in leisure and technology businesses.  Mr. Nathan
graduated with Honors from the London School of Economics and The
Law Society of England's College of Law. He is an Attorney at Law
of the State of California, and a Solicitor of the Supreme Court
of England and Wales.

                      About MGM Mirage

Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) --
http://www.mgmmirage.com/-- is a hotel and gaming company.  It
owns and operates 17 properties located in Nevada, Mississippi
and Michigan, and has investments in three other properties in
Nevada, New Jersey and Illinois.

                        *     *     *

As reported in the Troubled Company Reporter on Oct. 9, 2008,
Tamara Audi at The Wall Street Journal reports that MGM Mirage
needs to raise about $1.2 billion to complete the financing of its
CityCenter project in Las Vegas.

As reported in the Troubled Company Reporter on Oct. 7, 2008, MGM
Mirage said that CityCenter, its joint development project with
Dubai World, completed the first phase of its $3.0 billion
financing package by securing a $1.8 billion senior bank credit
facility.  The facility matures in April 2013 and is expected to
be increased to a total amount of $3.0 billion as additional
commitments are received.  CityCenter has received additional
signed commitment letters totaling in excess of $500 million,
which commitments are expected to be added to the facility once
completed.  MGM Mirage and Dubai World continue to work with
additional lenders and will seek the remaining commitment amounts
through a syndication process beginning on Oct. 7, 2008.  The
gross project budget consists of $9.3 billion of construction
costs (including capitalized interest), $1.7 billion of land, $0.2
billion of preopening expenses, and $0.1 billion of intangible
assets.  CityCenter is scheduled to be completed in December 2009.

According to WSJ, MGM Mirage is working to secure 41.2 billion in
financing to round out the $3 billion needed to complete the
project.  Jim Murren, MGM Mirage's chief operating officer and
president, said that he hopes to have the remaining funds
committed by Oct. 31, WSJ says.

As reported in the Troubled Company Reporter on Nov. 3, 2008,
Moody's Investors Service downgraded MGM MIRAGE's (MGM) Corporate
Family rating and Probability of Default rating to Ba3 from Ba2.
Moody's also downgraded MGM's senior unsecured bond rating to Ba3
from Ba2 and its senior subordinated bond rating to B2 from B1.
Moody's also assigned a (P)Ba1 provisional rating to the company's
proposed benchmark senior secured guaranteed note. All ratings
remain on review for further possible downgrade. The company's
Speculative Grade Liquidity rating was also downgraded to SGL-4
from SGL-3.

As reported in the Troubled Company Reporter on Oct. 31, 2008,
Standard & Poor's Ratings Services lowered its corporate credit
and issue-level ratings on Las Vegas-based MGM MIRAGE and its
subsidiaries by one notch.  The corporate credit rating was
lowered to 'BB-' from 'BB', and the rating outlook is negative.


MERRILL LYNCH: S&P Junks Ratings on 6 Classes From 12 RMBS
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 18
classes of asset-backed certificates from 12 residential mortgage-
backed securities transactions backed by U.S. prime jumbo
collateral from Merrill Lynch Mortgage Investors Trust and Merrill
Lynch Mortgage Investors Inc.  Concurrently, S&P affirmed its
ratings on the remaining 242 classes from these and 15 other
transactions from these issuers.

The downgrades reflect the inadequacy of the credit support levels
compared with the amount of total delinquencies (30-, 60-, and 90-
plus days, foreclosures, and REOs).  As of the Oct. 25, 2008,
remittance date, total delinquencies, as a percent of the current
pool balance, ranged between 1.71% (series 2004-A4) and 10.0%
(series 2004-G).

The affirmations reflect sufficient credit enhancement available
to support the ratings at their current levels.

Subordination provides credit support for these transactions.  The
collateral for these transactions originally consisted primarily
of U.S. prime jumbo mortgage loans.

                     Transaction Information
                     -----------------------
                (As of the October 2008 remittance)

              Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    2003-A                 $6,271,187               $5,457,777

              Downgraded classes        Subordination
              ------------------        -------------
              B-4                          $2,141,153
              B-5                          $1,250,153

            Merrill Lynch Mortgage Investors Inc.

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    2003-A2 (Group 1)        $996,873                        $0

              Downgraded classes        Subordination
              ------------------        -------------
              I-B-2                          $100,954

             Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    MLCC 2003C             $2,830,922                $1,955,947

              Downgraded classes        Subordination
              ------------------        -------------
              B-5                          $673,786

             Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    MLCC2003-H             $4,826,937                $2,483,084

              Downgraded classes        Subordination
              ------------------        -------------
              B-4                          $1,486,442
              B-5                            $941,850

              Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    2004-A1                $6,219,363                $3,939,709

              Downgraded classes        Subordination
              ------------------        -------------
              B-1                          $1,352,958
              B-2                            $298,958

              Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    MLCC2004-A             $7,235,754                $4,035,031

              Downgraded classes        Subordination
              ------------------        -------------
              B-5                          $1,653,864

              Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    2004-HB1               $4,122,484                $2,849,062

              Downgraded classes        Subordination
              ------------------        -------------
              B-5                            $645,064

              Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    2004-A2                $4,925,132                $3,535,303

              Downgraded classes        Subordination
              ------------------        -------------
              M-3                          $1,823,775
              B-1                            $918,775
              B-2                            $272,775

              Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    2004-A3                $4,905,304                $1,224,934

              Downgraded classes        Subordination
              ------------------        -------------
              B-2                            $397,117

              Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    2004-A4                $4,838,195                $1,614,784

              Downgraded classes        Subordination
              ------------------        -------------
              B-2                            $497,080

             Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    MLCC2004-F             $5,229,811                $3,741,612

              Downgraded classes        Subordination
              ------------------        -------------
              B-5                          $1,412,087

             Merrill Lynch Mortgage Investors Trust

    Series                 Total delinq.           Severe delinq.
    ------                 -------------           --------------
    2004-G                 $5,995,495                $1,754,227

              Downgraded classes        Subordination
              ------------------        -------------
              B-4                            $979,234
              B-5                            $416,973

                         Rating Actions

     Merrill Lynch Mortgage Investors Trust Series MLCC 2003-A
                          Series 2003-A

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           B-4        589929H50     BB             BBB-
           B5         589929H68     B              BB-

               Merrill Lynch Mortgage Investors Inc.
           Series 2003-A2

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           I-B-2      589929P36     B              BB-

              Merrill Lynch Mortgage Investors Trust
                        Series MLCC 2003C

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----

           B-5        589929T40     B              BB-

              Merrill Lynch Mortgage Investors Trust
                        Series MLCC2003-H

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           B-4        5899296Y9     BBB            BBB+
           B-5        5899296Z6     B              B+

              Merrill Lynch Mortgage Investors Trust
                          Series 2004-A1

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           B-1        59020UAK1     B              BB
           B-2        59020UAL9     CCC            B

              Merrill Lynch Mortgage Investors Trust
                        Series MLCC2004-A

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           B-5        59020UBC8     B              BB

              Merrill Lynch Mortgage Investors Trust
                          Series 2004-HB1

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           B-5        59020UFD2     CCC            BB-

              Merrill Lynch Mortgage Investors Trust
                         Series 2004-A2

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-3        59020UGZ2     BBB            A
           B-1        59020UHC2     B              BB+
           B-2        59020UHD0     CCC            B

              Merrill Lynch Mortgage Investors Trust
                          Series 2004-A3

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           B-2        59020UHV0     CCC            B

              Merrill Lynch Mortgage Investors Trust
                          Series 2004-A4

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           B-2        59020ULX1     CCC            B

             Merrill Lynch Mortgage Investors Trust
                       Series MLCC2004-F

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           B-5        59020UNK7     B              BB+

             Merrill Lynch Mortgage Investors Trust
                          Series 2004-G

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           B-4        59020UPH2     BB             BBB-
           B-5        59020UPJ8     CCC            BB

                        Ratings Affirmed

              Merrill Lynch Mortgage Investors Inc.
                         Series 1998-GN1

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A          589929PJ1     AAA
                 M-1        589929PK8     AA+
                 M-2        589929PL6     A

               Merrill Lynch Mortgage Investors Inc.
                         Series 1998-GN2

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A          589929RH3     AAA
                 M-1        589929RJ9     AA+
                 M-2        589929RK6     A
                 B          589929RL4     BBB-

              Merrill Lynch Mortgage Investors Inc.
                         Series 1998-GN3

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A          589929SE9     AAA

              Merrill Lynch Mortgage Investors Inc.
                         Series 2003-A2

                 Class      CUSIP         Rating
                 -----      -----         ------
                 I-A-1      589929M70     AAA
                 I-A-1-IO   589929M88     AAA
                 II-A-2     589929M96     AAA
                 II-A-2-IO  589929N20     AAA
                 II-A-3     589929N38     AAA
                 II-A-3-IO  589929N46     AAA
                 II-A-4     589929N53     AAA
                 II-A-4-IO  589929N61     AAA
                 I-M-1      589929N79     AA+
                 I-M-2      589929N87     AA
                 I-M-3      589929N95     A-
                 II-M-1     589929P51     AA+
                 II-M-2     589929P69     AA-
                 II-M-3     589929P77     BBB+
                 I-B-1      589929P28     BBB
                 II-B-1     589929P85     BBB-
                 II-B-2     589929P93     B+

               Merrill Lynch Mortgage Investors Inc.
                         Series 2003-A4

                 Class      CUSIP         Rating
                 -----      -----         ------
                 I-A        589929W53     AAA
                 II-A       589929W61     AAA
                 III-A      589929W87     AAA
                 IV-4       589929W95     AAA
                 II-A-IO    589929W79     AAA
                 M-1        589929X29     AAA
                 M-2        589929X37     AAA
                 M-3        589929X45     AA+
                 B-1        589929X86     A
                 B-2        589929X94     B+

              Merrill Lynch Mortgage Investors Inc.
                         Series 2003-A5

                 Class      CUSIP         Rating
                 -----      -----         ------
                 I-A        5899293M8     AAA
                 II-A-6     5899293T3     AAA
                 II-A-7     5899293U0     AAA
                 II-A-IO    5899293V8     AAA
                 M-1        5899293W6     AAA
                 M-2        5899293X4     AA
                 M-3        5899293Y2     BBB+
                 B-1        5899293Z9     BB+
                 B-2        5899294A3     B+

              Merrill Lynch Mortgage Investors Inc.
                         Series 2003-A6

                 Class      CUSIP         Rating
                 -----      -----         ------
                 I-A        5899294G0     AAA
                 II-A       5899294H8     AAA
                 M-1        5899294J4     AA+
                 M-2        5899294K1     AA-
                 M-3        5899294L9     BBB+
                 B-1        5899294M7     BBB
                 B-2        5899294N5     BB-

     Merrill Lynch Mortgage Investors Trust MLMI Series 2004-A3
                         Series 2004-A3

                 Class      CUSIP         Rating
                 -----      -----         ------
                 I-A        59020UHF5     AAA
                 II-A       59020UHG3     AAA
                 III-A-1    59020UHH1     AAA
                 III-A-2    59020UHJ7     AAA
                 III-A-3    59020UHK4     AAA
                 IV-A-1     59020UHL2     AAA
                 IV-A-2     59020UHM0     AAA
                 IV-A-3     59020UHN8     AAA
                 M-1        59020UHP3     AA
                 M-2        59020UHQ1     A
                 M-3        59020UHR9     BBB
                 B-1        59020UHU2     BB

     Merrill Lynch Mortgage Investors Trust Series MLCC 2003-A
                         Series 2003-A

                 Class      CUSIP         Rating
                 -----      -----         ------
                 1A         589929F94     AAA
                 2A-1       589929G28     AAA
                 2A-2       589929G36     AAA
                 X-1A       589929T65     AAA
                 X-2A1      589929G51     AAA
                 X-2A2      589929G69     AAA
                 X-1B       589929G77     AAA
                 X-2B       589929H84     AAA
                 X-3B       589929H92     AAA
                 B-1        589929G93     AA+
                 B-2        589929H27     A+
                 B-3A       589929H35     BBB+
                 B-3B       589929H43     BBB

     Merrill Lynch Mortgage Investors Trust Series MLCC 2003-B
                         Series 2003-B

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        589929K56     AAA
                 A-2        589929L71     AAA
                 X-A-1      589929K80     AAA
                 X-A-2      589929L89     AAA
                 X-B        589929K98     AAA
                 B-1        589929K64     AA+
                 B-2        589929K72     AA-
                 B-3        589929L30     A-
                 B-4        589929L48     BBB
                 B-5        589929L55     BB

     Merrill Lynch Mortgage Investors Trust Series MLCC 2003-C
                         Series MLCC 2003C

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        589929S41     AAA
                 A-2        589929T73     AAA
                 X-A-1      589929S58     AAA
                 X-A-3      589929T99     AAA
                 X-B        589929S66     AAA
                 B-1        589929S82     AAA
                 B-2        589929S90     AA-
                 B-3        589929T24     BBB+
                 B-4        589929T32     BBB-

     Merrill Lynch Mortgage Investors Trust Series MLCC 2003-D
                         Series 2003-D

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A          589929V21     AAA
                 X-A-2      589929W46     AAA
                 X-B        589929V47     AAA
                 B-1        589929V62     AAA
                 B-2        589929V70     AA+
                 B-3        589929V88     A+
                 B-4        589929V96     BBB+
                 B-5        589929W20     BB+

      Merrill Lynch Mortgage Investors Trust Series MLCC 2003-E
                         Series 2003-E

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        589929Y36     AAA
                 A-2        589929Y44     AAA
                 X-A-2      589929Y85     AAA
                 X-B        589929Y93     AAA
                 B-1        589929Y51     AAA
                 B-2        589929Z27     AA+
                 B-3        589929Z35     A+
                 B-4        589929Z43     A-
                 B-5        589929Z50     BBB-

     Merrill Lynch Mortgage Investors Trust Series MLCC 2003-F
                         Series 2003-F

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        5899292M9     AAA
                 A-2        5899292N7     AAA
                 A-3        5899292W7     AAA
                 X-A-2      5899292Q0     AAA
                 X-B        5899292R8     AAA
                 B-1        5899292T4     AAA
                 B-2        5899292U1     AA
                 B-3        5899292V9     A
                 B-4        5899293J5     BBB+
                 B-5        5899293K2     BB

     Merrill Lynch Mortgage Investors Trust Series MLCC 2003-G
                         Series MLCC2003-G

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        5899295V6     AAA
                 A-2        5899295W4     AAA
                 A-3        5899295X2     AAA
                 A-4A       5899296J2     AAA
                 A-4B       5899296K9     AAA
                 X-A-2      5899295Z7     AAA
                 X-B        5899296A1     AAA
                 B-1        5899296C7     AAA
                 B-3        5899296E3     A
                 B-2        5899296D5     AA
                 B-4        5899296F0     BBB+
                 B-5        5899296G8     BB

     Merrill Lynch Mortgage Investors Trust Series MLCC 2003-H
                         Series MLCC2003-H

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        5899296M5     AAA
                 A-2        5899296N3     AAA
                 A-3A       5899296P8     AAA
                 A-3B       5899296V5     AAA
                 X-A-2      5899296R4     AAA
                 X-B        5899296X1     AAA
                 B-1        5899296S2     AAA
                 B-2        5899296T0     AA+
                 B-3        5899296U7     A+

     Merrill Lynch Mortgage Investors Trust Series MLCC 2004-A
                         Series MLCC2004-A

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        59020UAR6     AAA
                 A-2        59020UAS4     AAA
                 X-A-2      59020UAV7     AAA
                 X-B        59020UAW5     AAA
                 B-1        59020UAX3     AAA
                 B-2        59020UAY1     AA
                 B-3        59020UAZ8     A-
                 B-4        59020UBB0     BBB-

     Merrill Lynch Mortgage Investors Trust Series MLCC 2004-B
                         Series MLCC2004-B

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        59020UBU8     AAA
                 A-2        59020UBV6     AAA
                 A-3        59020UBW4     AAA
                 X-A        59020UBX2     AAA
                 X-B        59020UBZ7     AAA
                 B-1        59020UCB9     AAA
                 B-2        59020UCC7     AA+
                 B-3        59020UCD5     AA-
                 B-4        59020UCE3     A-
                 B-5        59020UCF0     BB

     Merrill Lynch Mortgage Investors Trust Series MLCC 2004-C
                         Series MLCC2004-C

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        59020UDN2     AAA
                 A-2        59020UDP7     AAA
                 A-2A       59020UDV4     AAA
                 A-2B       59020UDW2     AAA
                 A-3        59020UDQ5     AAA
                 X-A        59020UDR3     AAA
                 X-B        59020UEB7     AAA
                 B-1        59020UDS1     AAA
                 B-2        59020UDT9     AA+
                 B-3        59020UDU6     A+
                 B-4        59020UEC5     A-
                 B-5        59020UED3     BB+

     Merrill Lynch Mortgage Investors Trust Series MLCC 2004-D
                         Series MLCC2004-D

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        59020UGF6     AAA
                 A-2        59020UGG4     AAA
                 A-3        59020UGH2     AAA
                 X-A        59020UGJ8     AAA
                 X-B        59020UGK5     AAA
                 B-1        59020UGM1     AAA
                 B-2        59020UGN9     AA+
                 B-3        59020UGP4     A+
                 B-4        59020UGQ2     BBB+
                 B-5        59020UGR0     BB+

     Merrill Lynch Mortgage Investors Trust Series MLCC 2004-E
                         Series 2004-E

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        59020UJP1     AAA
                 A-2A       59020UJQ9     AAA
                 A-2B       59020UJR7     AAA
                 A-2C       59020UJS5     AAA
                 A-2D       59020UJT3     AAA
                 X-A        59020UJU0     AAA
                 X-B        59020UJV8     AAA
                 B-1        59020UJX4     AAA
                 B-2        59020UJY2     AA+
                 B-3        59020UJZ9     A+
                 B-4        59020UKA2     BBB+
                 B-5        59020UKB0     BB

     Merrill Lynch Mortgage Investors Trust Series MLCC 2004-F
                         Series MLCC2004-F

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1A       59020UMZ5     AAA
                 A-1B       59020UNA9     AAA
                 A-2        59020UNB7     AAA
                 X-A        59020UNC5     AAA
                 X-B        59020UND3     AAA
                 B-1        59020UNF8     AAA
                 B-2        59020UNG6     AA+
                 B-3        59020UNH4     A+
                 B-4        59020UNJ0     BBB+

     Merrill Lynch Mortgage Investors Trust Series MLCC 2004-G
                         Series 2004-G

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        59020UNZ4     AAA
                 A-2        59020UPA7     AAA
                 X-A        59020UPB5     AAA
                 X-B        59020UPG4     AAA
                 B-1        59020UPD1     AA+
                 B-2        59020UPE9     A+
                 B-3        59020UPF6     A-

    Merrill Lynch Mortgage Investors Trust Series MLCC 2004-HB1
                         Series 2004-HB1

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        59020UET8     AAA
                 A-2        59020UEU5     AAA
                 A-3        59020UEV3     AAA
                 X-A        59020UEW1     AAA
                 X-B        59020UEX9     AAA
                 B-1        59020UEZ4     AA+
                 B-2        59020UFA8     AA-
                 B-3        59020UFB6     BBB
                 B-4        59020UFC4     BB

     Merrill Lynch Mortgage Investors Trust Series MLMI 2004-A4
                         Series 2004-A4

                 Class      CUSIP         Rating
                 -----      -----         ------
                 A-1        59020ULQ6     AAA
                 A-2        59020ULR4     AAA
                 A-3        59020ULS2     AAA
                 M-1        59020ULT0     AA
                 M-2        59020ULU7     A
                 M-3        59020ULV5     BBB
                 B-1        59020ULW3     BB

     Merrill Lynch Mortgage Investors Trust Series MLMI 2004-A1
                         Series 2004-A1

                 Class      CUSIP         Rating
                 -----      -----         ------
                 I-A        59020UAA3     AAA
                 II-A-1     59020UAB1     AAA
                 II-A-2     59020UAC9     AAA
                 II-A-IO    59020UAD7     AAA
                 III-A      59020UAE5     AAA
                 IV-A       59020UAF2     AAA
                 M-1        59020UAG0     AA
                 M-2        59020UAH8     A
                 M-3        59020UAJ4     BBB

     Merrill Lynch Mortgage Investors Trust Series MLMI 2004-A2
                         Series 2004-A2

                 Class      CUSIP         Rating
                 -----      -----         ------
                 I-A        59020UGT6     AAA
                 II-A-1     59020UGU3     AAA
                 II-A-2     59020UGV1     AAA
                 M-1        59020UGX7     AA+
                 M-2        59020UGY5     AA
                 II-A-3     59020UGW9     AAA


MERRITT FUNDING: Moody's May Further Cut Junk Ratings on 6 Notes
----------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
further possible downgrade the ratings of notes in these
transactions:

Merritt Funding Trust, Series 2005-2

Class Description US$205,404,000 Class A-2 Floating Rate Senior
Secured Notes Due 2016

  -- Prior Rating: Aaa, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Aa2, on review for possible downgrade

Class Description: US$69,998,000 Class B Floating Rate Secured
Deferrable Interest Rate Notes Due 2016

  -- Prior Rating: A2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Baa3, on review for possible downgrade

Class Description US$20,883,000 Class C Floating Rate Secured
Deferrable Interest Rate Notes Due 2016

  -- Prior Rating: Baa2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: B1, on review for possible downgrade

Class Description: US$30,165,000 Preferred Trust Certificates Due
2016

  -- Prior Rating: Ba2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Caa2, on review for possible downgrade

GE Commercial Loan Trust, Series 2006-1

Class Description US$281,007,000 Class A-2 Floating Rate Secured
Notes, due 2017

  -- Prior Rating: Aaa , on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: A3, on review for possible downgrade

Class Description: US$100,000,000 Class A-PT Floating Rate Secured
Notes, due 2017

  -- Prior Rating: Aaa
  -- Prior Rating Date: April 27, 2006
  -- Current Rating: A3, on review for possible downgrade

Class Description: US$80,753,000 Class B Floating Rate Secured
Deferrable Interest Rate Notes, due 2017

  -- Prior Rating: A2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: B1, on review for possible downgrade

Class Description US$32,123,000 Class C Floating Rate Secured
Deferrable Interest Rate Notes, due 2017

  -- Prior Rating: Baa2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Caa1, on review for possible downgrade

Class Description: US$37,477,000 Preferred Trust Certificates

  -- Prior Rating: Ba2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Caa3, on review for possible downgrade

GE Commercial Loan Trust, Series 2006-2

Class Description US$291,823,000 Class A-2 Floating Rate Secured
Notes, Due 2016

  -- Prior Rating: Aaa , on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: A2, on review for possible downgrade

Class Description: US$30,849,000 Class B Floating Rate Secured
Deferrable Interest Rate Notes, Due 2016

  -- Prior Rating: Aa2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Baa1, on review for possible downgrade

Class Description US$56,697,000 Class C Floating Rate Secured
Deferrable Interest Rate Notes, Due 2016

  -- Prior Rating: A2, on review for possible downgrade
  -- Prior Rating Date: Ocotber 30, 2008
  -- Current Rating: Ba3, on review for possible downgrade

Class Description: US$47,526,000 Class D Floating Rate Secured
Deferrable Interest Rate Notes, Due 2016

  -- Prior Rating: Baa3, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: B3, on review for possible downgrade

Class Description US$8,337,000 Preferred Trust Certificates, Due
2016

  -- Prior Rating: Ba2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Caa3, on review for possible downgrade

GE Commercial Loan Trust, Series 2006-3

Class Description US$433,467,000 Class A-1 Floating Rate Secured
Notes, Due 2015

  -- Prior Rating: Aaa
  -- Prior Rating Date: September 28, 2006
  -- Current Rating: Aa3, on review for possible downgrade

Class Description US$352,822,000 Class A-2 Floating Rate Secured
Notes, Due 2017

  -- Prior Rating: Aaa, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Baa1, on review for possible downgrade

Class Description: US$36,826,000 Class B Floating Rate Secured
Deferrable Interest Rate Notes, Due 2017

  -- Prior Rating: Aa2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Baa3, on review for possible downgrade

Class Description US$64,695,000 Class C Floating Rate Secured
Deferrable Interest Rate Notes, Due 2017

  -- Prior Rating: A2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: B2, on review for possible downgrade

Class Description: US$44,789,000 Class D Floating Rate Secured
Deferrable Interest Rate Notes, Due 2017

  -- Prior Rating: Baa3, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Caa2, on review for possible downgrade

Class Description: US$14,431,000 Preferred Trust Certificates

  -- Prior Rating: Ba2, on review for possible downgrade
  -- Prior Rating Date: October 30, 2008
  -- Current Rating: Caa3, on review for possible downgrade

According to Moody's, these rating actions are a result of the
risk of par loss due to potential required asset sales.  This
feature, which is incorporated in all of the above transactions,
specifies general conditions under which an issuer is required to
sell the underlying loans.  Under current market conditions there
is an increased potential for such required asset sales, which
could have the result of exposing the transactions to elevated
levels of loan price volatility.

These rating actions reflect Moody's cash flow analysis of the
transactions' rated tranches under various scenarios.  These
scenarios were based on assumptions regarding the amount of loan
sales and loan sale prices.  The tranches remain on review for
possible downgrade due to the risk that loan price volatility will
potentially result in further loan sales.


MIAMI BEACH: S&P Changes Rating to 'BB' on $268.4 Mil. Bonds
------------------------------------------------------------
Standard & Poor's Ratings Services revised its long-term rating to
'BB' from 'BB+' on Miami Beach Health Facilities Authority,
Florida's $268.4 million series 2004, 2001A, and 1998 bonds issued
for Mount Sinai Medical Center.

In S&P's opinion, Mount Sinai Medical Center's cardiac-related
programs have encountered increased competition, diminishing the
hospital's financial profile.  S&P assigned a negative outlook
last year with the expectation that increased operating losses or
decreased volumes could result in a lower rating.  While the
volume trend reversed in 2008, S&P believes operating losses
remain significant and 2007 performance was under budget and below
S&P's expectations at the time of the last review.

Management recruited a new cardiac surgery team that will practice
exclusively at Mount Sinai starting this month.  While an increase
in these more profitable volumes may boost earnings in the future,
in S&P's view, the magnitude and persistence of operating losses
over the past few years diminished Mount Sinai's financial profile
to what S&P considers a 'BB' rating level.

In S&P's opinion, the 'BB' rating reflects Mount Sinai's
significant operating losses, driven largely by the loss of
cardiac volume over the past several years; diminished balance
sheet from the losses, but also due to the current investment
environment; and continued competitive pressure from suburban-
based hospitals, although Mount Sinai remains the only hospital on
Miami Beach.

S&P's rating outlook remains negative with a further downgrade
possible unless Mount Sinai demonstrates what S&P considers a
meaningful reduction in its annual operating losses and improved
cash flow and debt service coverage.  While the foundation and
nonoperating earnings have been, in S&P's opinion, strong enough
historically to warrant keeping the rating in the 'BB' category,
S&P believes that the current economic slump may also pressure the
rating over the next several years.  If Mount Sinai meets its
stated 2009 budget without further liquidity or balance-sheet
erosion, it is possible that the outlook could be returned to
stable next year.

S&P continues to consider the Mount Sinai Medical Center
Foundation, which has been transferring $10 million annually to
the Medical Center -- as without that support, S&P would likely
lower S&P's rating further.  S&P will closely monitor the
foundation's assets and its ability to transfer funds annually to
the hospital in light of investment losses and the current
economic environment.


MORGAN STANLEY: Fitch Lowers Ratings on $7.523 Mil. Notes to 'B+'
-----------------------------------------------------------------
Fitch Ratings has downgraded the notes issued by Morgan Stanley
ACES SPC Series 2006-17 and assigned a Negative Outlook,:

  -- US$7,523,000 notes due December 2011 (ISIN: USG62615EV08)
     downgraded to 'B+' from 'BB'; Negative Outlook.

The transaction is a funded static synthetic corporate CDO
referencing a portfolio of corporate obligations with a total
reference portfolio notional amount of US$10bn.

The rating action follows the bankruptcy filing of Tribune Co.
(Issuer Default Rating 'D'/Senior unsecured rating 'C') that
represents 1% of portfolio notional.  Fitch has assigned a
recovery rate of RR6 to all Tribune's senior unsecured
obligations, indicating an expected recovery rate of between 0-
10%.  The rating action and Negative Outlook reflect the expected
erosion of credit enhancement to around 3.5% which is not
compatible with a BB range rating given the portfolio profile.
The transaction currently has 19.0% of exposure to the Banking &
Finance industry, 12.6% of the portfolio on Watch Negative and a
substantial 36.4% on Negative Outlook.  In addition, 22.7% of the
portfolio is currently rated below investment grade, with 0.5%
rated in the 'CCC' or below category and 5.6% in the 'B' category.
Current credit enhancement levels indicate that the transaction
would not be able to withstand the default of all CCC range and B
range rated assets, if realised recovery rates continue to be low.

At close, proceeds from the issuance of the notes were used to
purchase charged assets to collateralize CDS between the issuer
and Morgan Stanley Capital Services Inc. (guaranteed by Morgan
Stanley, 'A'/'F1'/Stable Outlook).  The charged asset has been
switched to an investment in shares of the Morgan Stanley US
Dollar Liquidity Fund ('AAA'/ 'V1+') from a Lehman Brothers US
Dollar Liquidity Fund.

Fitch introduced Rating Outlooks for U.S. structured finance in
September 2008 to provide investors with forward-looking analysis
for a structured finance tranche's credit performance.  Fitch's
Rating Outlook indicates the likely direction of any rating change
over a one- to two-year period and may be Positive, Negative,
Stable or, occasionally, Evolving.


MORGAN STANLEY: S&P Downgrades Rating on $3 Mil. Notes to 'B-'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the
$3.0 million class A-9 secured fixed-rate notes from Morgan
Stanley ACES SPC's series 2006-8 to 'B-'from 'B'.

The rating action reflects the Dec. 11, 2008, lowering of the
corporate credit and other ratings on The Neiman Marcus Group Inc.
(B+/Negative/--).

Morgan Stanley ACES SPC's series 2006-8 is a credit-linked note
transaction.  The rating on each class of notes is based on the
lowest of (i) the rating on the respective reference obligations
for each class (with respect to class A-9, the senior subordinated
notes issued by The Neiman Marcus Group Inc.{'B-'}); (ii) the
rating on the guarantor of the counterparty to the credit default
swap, the interest rate swap, and the contingent forward
agreement, Morgan Stanley (A+/Negative/A-1); and (iii) the 'AAA'
rating on the underlying securities, the class A certificates
issued by BA Master Credit Card Trust II's series 2001-B due 2013.


MOTOR COACH: Creditors Committee Opposes Disclosure Statement
-------------------------------------------------------------
The official committee of unsecured creditors formed in Motor
Coach Industries International Inc.'s says, the disclosure
statement to Motor Coach's Chapter 11 plan doesn't tell creditors
there "are substantial legal issues in dispute."

As required by Section 1125(a)(1) of the Bankruptcy Code, a
Chapter 11 disclosure statement must contain information necessary
to enable holders of claims and interests in the debtor's estates
to make an informed judgment on the plan.

According to Bloomberg News' Bill Rochelle, Motor Coach served a
terse eight-page objection, saving its big guns for the hearing on
confirmation of the proposed Chapter 11 plan.  Motor Coach will be
able to begin soliciting votes on its Chapter 11 plan and seek
confirmation of the plan after it receives approval of the
Disclosure Statement.

The Creditors Committee, according to Bloomberg News, said it is
moving toward a "very expensive discovery process" and a "lengthy
trial" over whether it's proper for the plan to pay unsecured
creditors nothing.

The Debtor won't give ballots to the unsecured creditors as they
are deemed to reject the plan.  Only creditors secured by a third
lien on the Debtors' assets -- classified under Class 4 -- are
entitled to vote for the plan.

Section 1129(a)(8) of the Bankruptcy Code requires that each class
of claims or interests under a plan has either accepted the plan
or is not impaired under the plan.  The Debtor, however, will seek
confirmation of the Plan under Section 1129(b)(1)'s "cramdown"
provision.  Under the cramdown provision, upon the request of the
plan proponent, the plan may be confirmed if it does not
discriminate unfairly, and is fair and equitable, with respect to
each class of claims or interests that is impaired under, and has
not accepted, the plan.

                        Terms of the Plan

The Troubled Company Reporter reported Nov. 4, 2008, that Motor
Coach and its affiliates filed a joint Chapter 11 plan of
reorganization, and a disclosure statement on that Plan on Oct.
30, 2008.

A hearing will take place on Dec. 17, 2008, at 11:30 a.m., to
consider the adequacy of the information in the Debtors'
disclosure statement.  The hearing will be held at 824 North
Market Street, 6th floor, Courtroom 1 in Wilmington, Delaware.
Objections, if any, are due Dec. 8, 2008.

The plan will deleverage the Debtors' balance sheet by, among
other things:

  -- reduce the Debtors' total prepetition indebtedness by paying
     in full about $160 million of second lien obligations and
     discharging an additional $480 million in prepetition
     indebtedness;

  -- improve cash flows by reducing ongoing interest expense; and

  -- provide investment of as much as $160 million in new capital
     through the rights offering to (i) fund the Debtors'
     emergence from Chapter 11, (ii) appropriately capitalize the
     reorganized Debtors, and (iii) facilitate the implementation
     of the Debtors' business plan.

Under the plan, the Debtors will issue shares of new common stock
to holders of allowed Class 4 claims and new preferred stock to
the rights offering participants.

The plan classifies interests against and liens in the Debtors in
eight classes.  The classification of treatment of interests and
claims are:

                 Treatment of Interests and Claims

                   Types                        Estimated

         Class     of Claims       Treatment    Recovery
         -----     ---------       ---------    ---------

         1         other priority  unimpaired   100%
                   claims

         2         other secured   unimpaired   100%
                   claims

         3         secured second  impaired     100%
                   lien credit
                   agreement claim

         4         secured third   impaired     unknown
                   lien credit
                   agreement claim

         5         general         unimpaired   0%
                   unsecured claim

         6         intercompany    unimpaired   100%
                   claim

         7         equity interest impaired     0%

         8         intercompany    unimpaired   100%
                   interest

                         About Motor Coach

Wilmington, Delaware-based Motor Coach Industries International,
Inc. -- http://www.mcicoach.com/-- and its subsidiaries
manufacture intercity coaches for the tour, charter, line-haul,
scheduled service, and commuter transit sectors in the U.S. and
Canada.  They also operate seven sales centers and nine service
centers in the U.S. and Canada and is the industry's supplier of
aftermarket parts for most makes and models.  The Company and its
debtor-affiliates filed for separate Chapter bankruptcy protection
with the United States Bankruptcy Court for the District of
Delaware on September 15, 2008 (Lead Case No. 08-12136), to
implement a pre-negotiated restructuring plan to be funded by
Franklin Mutual Advisors, LLC and certain of its affiliates.  The
company's Canadian operations are not included in the filing.
Kenneth S. Ziman, Esq., and Elisha D. Graff, Esq., at Simpson
Thacher & Bartlett LLP, in New York; and Jason M. Madron, Esq.,
and Lee E. Kaufman, Esq., at Richards Layton & Finger, P.A., in
Wilmington, Delaware, represent the Debtors in their restructuring
efforts.  Kurtzman Carson Consultants LLC serves as claims and
notice agent.  Rothschild Inc. and AlixPartners LLP also provide
restructuring advice.  At the time of filing, the Debtors listed
assets of between $500,000,000 and $1,000,000,000 and liabilities
of between $100,000,000 and $500,000,000.


NATIONAL CONSUMER: Fitch Downgrades Individual Rating to 'B/C'
--------------------------------------------------------------
Fitch Ratings has placed the long-term Issuer Default Rating and
senior debt rating of National Consumer Cooperative Bank and NCB,
FSB on Rating Watch Negative.  Fitch has also downgraded NCB's
Individual rating to 'B/C' from 'B'.  Approximately $1.8 billion
in debt is affected by this action.

These ratings have been placed on Rating Watch Negative:

   National Consumer Cooperative Bank

   -- Long-term IDR 'A-';
   -- Senior unsecured debt 'A-';
   -- Short-term IDR 'F2';
   -- Commercial paper 'F2'.

This rating has been downgraded and placed on Rating Watch
Negative:

   National Consumer Cooperative Bank

   -- Individual to 'B/C' from 'B'.

NCB's placement on Rating Watch Negative reflects Fitch's concern
that recent operating performance has put pressure on the
company's ability to comply with financial covenants under its
bank credit agreement.  In the event that NCB tripped a covenant,
the company would seek to either amend or obtain a waiver of the
covenant, which the company has done previously, and Fitch
believes would be the most likely outcome.  Nonetheless, such
accommodations would be costly in Fitch's opinion. Although the
company has modest debt maturities, it does have a $50 million
bond due in January 2009, and Fitch believes would be paid off
with a draw on the bank line, assuming there are no outstanding
covenant issues.  The bonds are cross-defaulted with the bank
line.  At Sept. 30, 2008, NCB had available capacity under the
bank line of $209.6 million.

The resolution of the Rating Watch will be driven by NCB's ability
to address potential covenant issues over the near term.  However,
even if near term liquidity issues are resolved, Fitch has longer
term concerns surrounding operating performance as well as
limitations in the company's legal entity structure which limit
the company's loan capabilities.  Although the limitations have
been known, the current markets conditions have highlighted them.

These mainly emanate from the company's government sponsored
entity (GSE) status as well as its ownership of NCB, FSB, a
thrift, which require the company to meet certain targets to
fulfill its GSE mission as well as the need to meet the qualified
thrift lender test (QTL) as a thrift.  Taken together, these
concerns, if not addressed, could result in a downgrade of the
company's IDR by a notch.

Fitch's downgrade of NCB's Individual rating to 'B/C' is driven by
continued weakness in earnings and profitability due to capital
markets dislocations, primarily related to the dormant CMBS
market, which was an important earnings driver and funding source.
Fitch's Individual rating reflects an entities intrinsic financial
profile, absent any external financial support.  A 'B/C' rating
denotes an adequate institution, however, concerns are building
regarding profitability and operating environment.

Fitch has downgraded and placed the following on Rating Watch
Negative:

   National Consumer Cooperative Bank

   -- Individual to 'B/C' from 'B'.

   NCB, FSB

   -- Individual to 'B/C from 'B'.

Fitch has placed the following on Rating Watch Negative:

   National Consumer Cooperative Bank

   -- Long-term IDR 'A-';
   -- Senior unsecured debt 'A-';
   -- Short-term IDR 'F2';
   -- Commercial paper 'F2'.

   NCB, FSB

   -- Long-term IDR 'A-';
   -- Short-term IDR 'F2';
   -- Long-term deposit obligations 'A';
   -- Short-term deposit obligations 'F1'.

   NCB Capital Trust I

   -- Trust preferred stock 'BBB+'.

Fitch also rates the following:

   National Consumer Cooperative Bank

   -- Support '5';
   -- Support floor 'NF'.

   NCB, FSB

   -- Support '1'.


NORTEL NETWORKS: To Cure NYSE Average Closing Price Non-Compliance
------------------------------------------------------------------
Nortel Networks Corporation received notice from the New York
Stock Exchange that Nortel has fallen below one of NYSE's
continued listing standards regarding price criteria for its
common stock as a result of the company's common shares having an
average closing price of less than $1.00 per share during the
consecutive 30 trading days ended Dec. 9, 2008.  Under the NYSE's
rules, the company has six months from the date of the notice to
bring its average common share price back above $1.00.  During the
interim, Nortel's common stock will remain listed on the NYSE,
subject to compliance with other applicable NYSE continued listing
requirements.

Nortel will notify the NYSE within the required 10-business day
period that it intends to cure the deficiency.  If the average
closing price does not sufficiently improve, Nortel may consider
presenting a proposal to its shareholders for a consolidation of
its outstanding common shares at its annual meeting planned for
spring 2009.

                  About Nortel Networks

Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and enterprise
networks, support multimedia and business-critical applications.
Nortel's technologies are designed to help eliminate today's
barriers to efficiency, speed and performance by simplifying
networks and connecting people to the information they need, when
they need it.  Nortel does business in more than 150 countries
around the world.  Nortel Networks Limited is the principal direct
operating subsidiary of Nortel Networks Corporation.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 11, 2008,
Nortel Networks Corp. has sought legal advice on its possible
bankruptcy filing in case its restructuring plan fails, Sara
Silver and Joann S. Lublin at The Wall Street Journal report,
citing people familiar with the situation.

As reported in the Troubled Company Reporter on Nov. 18, 2008, RBC
Capital Markets said that Nortel Networks might have to file for
Chapter 11 protection by 2011 if it fails to get cash injection.
RBC Capital analyst Mark Sue said that Nortel Networks is
"overwhelmed with debt and burning cash."


NUVEEN INVESTMENTS: Moody's Lowers Corporate Family Rating to 'B2'
------------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Nuveen Investments, Inc. to B2 from B1.  In the same
rating action, Moody's also lowered the rating of Nuveen's senior
secured bank facility to B1 from Ba3 and lowered the rating of the
company's senior unsecured notes to Caa1 from B3.  All the ratings
have been placed on review for further downgrade.

Moody's stated that the rating action was driven by anticipated
revenue declines owing to a material reduction in the company's
assets under management, which has resulted primarily from severe
equity market declines.  The rating agency believes that the
decrease in Nuveen's earnings will likely lead to a material
elevation in the company's already high leverage and possibly a
breach of a financial covenant in the company's bank facility in
2009.

Moody's noted that Nuveen's downgrade was part of an ongoing
examination of asset management firms given its negative outlook
on the industry broadly, the severity of recent market declines,
and the adverse impact on firms, like Nuveen, that operate with
high levels of financial leverage.

Moody's Vice President/Senior Credit Officer Matthew Noll stated,
"The rating action reflects the material reliance Nuveen now has
on a rebound in the market and maintaining cooperative lenders."
Moody's expects Nuveen's revenues and operating earnings to
decline by over 20% in 2009, despite undertaking cost cutting
initiatives.  Additional challenges such as refinancing auction
rate securities and a generally weaker demand for new closed end
funds and retail separately managed accounts create further
uncertainties for the company.  Moody's views Nuveen's strong
excess liquidity position and patient private equity sponsors as
mitigating factors.

The rating agency said that its review for further downgrade will
focus on the company's plan to manage its senior secured leverage
covenant of 6x.  The review will also examine the company's 2009
plan to operate through a potentially protracted equity market
downturn in which the company could be operating with negative net
cash flows.

These ratings were downgraded and placed on review for further
downgrade:

  -- Nuveen Investments, Inc.: Corporate family rating downgraded
     to B2 from B1; senior secured revolver downgraded to B1 from
     Ba3; senior secured term loan downgraded to B1 from Ba3;
     senior unsecured notes downgrade to Caa1 from B3.

Nuveen Investments, Inc., headquartered in Chicago, is a US-
domiciled holding company whose subsidiaries provide investment
management products and services to retail and institutional
investors predominantly in the US.  The company's assets under
management were $134 billion as of September 30, 2008.
The last rating action was on February 29, 2008 when the outlook
on Nuveen was changed to negative from stable.


PENN TRAFFIC: Incurs Nine Month Loss of $21.4 Million
-----------------------------------------------------
The Penn Traffic Company ("Pink Sheets": PTFC), which operates or
supplies more than 210 Northeastern U.S. supermarkets, reported
revenues of 287.3 million in the three months ended Nov. 1, 2008,
compared to $298.7 million in the third quarter of fiscal 2008,
reflecting a reduction in corporate-owned grocery stores to 93
from 104 one year ago.

Penn Traffic's net loss was $5.6 million, or $0.67 per share, in
the third quarter of fiscal 2009, compared to $9.6 million, or
$1.13 per share, during the same period last year.  Third quarter
fiscal 2009 results reflect $1.3 million in non-recurring charges
including: (1) professional fees; (2) closed-store costs; (3) SEC
legal costs; (4) severance; (5) asset sales and (6) Chapter 11
reorganization costs. Third quarter 2008 results included non-
recurring charges of $5.6 million.

"We continued to make solid progress in improving Penn Traffic's
efficiency and cost structure during the third quarter," President
and Chief Executive Officer Gregory J. Young said.  "Our
commitment to offer our customers good value in a welcoming
shopping environment is unwavering.  And, while we don't control
the economic forces that have pressured revenues and margins
across the retail grocery industry, we will continue to modernize
and streamline operations to ensure Penn Traffic is well prepared
to emerge from this recession stronger and fully prepared to take
advantage of incremental improvements in the economy as they
occur."

The fiscal 2009 industry-wide trend of consumers consolidating
shopping trips, trading down in their purchasing decisions and
curbing impulse buying continued during the third quarter,
resulting in lower sales volumes compared to the third quarter of
fiscal 2008. Mitigating the impact of this trend in the third
quarter were the continued success of the company's rewards
program, launched early in fiscal 2009, investments in
marketing and advertising, and value pricing.

Penn Traffic's gross margins, like those of many other food
retailers, were pressured by high commodity costs that have not
been fully passed onto customers in order to maintain value
pricing in the competitive marketplace.  Gross profit was
$72.4 million, or 25.2% of revenues, in the third quarter of
fiscal 2009, compared to $79.8 million, or 26.7% of revenues,
during the third quarter of fiscal 2008.

Even while increasing ad spending in the third quarter of fiscal
2009, Penn Traffic reduced selling and administrative expenses to
$76.3 million, or 26.6% of revenues, compared to $83.3 million, or
27.9%, during the same period last year. Lower selling and
administrative expenses reflect the company's aggressive
continuous-improvement initiatives and corporate-overhead
reductions during fiscal 2009, as well as its smaller store
portfolio.

Third quarter fiscal 2009 operating loss from continuing
operations was $3.1 million, compared to $3.3 million during the
same period the year prior.

EBITDA, including non-recurring charges, was $2.1 million in third
quarter of fiscal 2009, compared to $1.0 million in the same
period last year. Adjusted for non-recurring charges, EBITDA was
$3.4 million, or 1.2 percent of revenues in the quarter ending
November 1, 2008, compared to $6.6 million, or 2.2 percent of
revenues, during the same period last year.

Bloomberg News relates that Penn Traffic was in Chapter 11 twice.
Most recently, it confirmed a reorganization plan in March 2005
and gave all the stock to unsecured creditors while cutting the
store count almost in half.  It completed a previous bankruptcy
reorganization in June 1999 before the second filing in May 2003.

According to Bloomberg's Bill Rochelle, since the last bankruptcy,
the stock's closing high was $24.25 on June 4, 2007.  It closed
Dec. 11 at 10 cents a share in over-the-counter trading.

                        About Penn Traffic

The Penn Traffic Company operates stores in Pennsylvania, New
York, Vermont and New Hampshire using the names BiLo, P&C and
Quality. The company also has a wholesale food-distribution
business.

Penn Traffic filed for chapter 11 protection on May 30, 2003
(Bankr. S.D.N.Y. Case No. 03-22945).  Kelley Ann Cornish, Esq., at
Paul Weiss Rifkind Wharton & Garrison, represented the Debtors in
their restructuring efforts.  When the grocer filed for protection
from their creditors, they listed $736,532,614 in total assets and
$736,532,610 in total debts.  The Court confirmed the Debtor's
First Amended Plan of Reorganization on March 17, 2005.  The Plan
became effective April 13, 2005, allowing it to formally emerge
from Chapter 11.


PERRY REALTY: Case Summary & 13 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Perry Realty Plaza, Inc.
        3510 Perry Avenue
        Bronx, NY 10467

Bankruptcy Case No.: 08-15003

Chapter 11 Petition Date: December 13, 2008

Court: Southern District of New York (Manhattan)

Debtor's Counsel: Christopher E. Finger, Esq.
                  CEFLaw@aol.com
                  778 Castle Hill Avenue
                  Bronx, NY 10473
                  Tel: (718) 824-5800
                  Fax: (718) 430-9230

Total Assets: $8,000,000

Total Debts: $14,165,085

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
54, LLC                        bank loan;        $12,710,141
5600A Broadway                 collateral:
Bronx, NY 10463                $8,000,000;
                               unsecured:
  Zucker & Kwestel LLP         $4,710,141
  56 Harrison Street
  New Rochelle, NY 10801
  Jay B. Zucker, Esq.
  Tel: (914) 499-2610

RMJ & Son's Construction Inc.  trade debt;      $450,000
751 Commonwealth Avenue        collateral:
Bronx, NY 10473                $8,000,000;
                               unsecured:
                               $450,000

R & R Block & Brick Corp.      trade debt;      $300,000
751 Commonwealth Avenue        collateral:
Bronx, NY 10473                $8,000,000;
                               unsecured:
                               $300,000

L & V Construction & Iron      trade debt       $240,000
Works Inc.

Accurate Electric & Control    trade debt       $125,000
Systems Inc.

City of New York, Department                    $95,000
of Finance

Palace Plumbing & Heating      trade debt       $81,354
Supply Corp.

New El Jam Building Materials  trade debt       $63,000

MSS Construction Corp.         trade debt       $45,000

C & L Windows & Construction   trade debt       $40,000

New York City Environmental                     $7,250
Control Bd.

Latin American Container       trade debt       $6,840

New York City Water Board                       $1,500


PILGRIM'S PRIDE: Incurs $1.06B Operating Loss for FY2008
--------------------------------------------------------
Pilgrim's Pride Corp., filed with the Securities and Exchange
Commission its annual report on form 10-K showing an operating
loss of $1.06 billion for the fiscal year ended Sept. 27 on
revenue of $8.5 billion.  The gross loss was $164 million, and the
net loss was $999 million.

The company focused its sales efforts on the foodservice industry,
principally chain restaurants and food processors.  In 2008, it
sold 8.4 billion pounds of dressed chicken and generated net sales
of $8.5 billion.  In 2008, its US operations, including Puerto
Rico, accounted for 93.2% of net sales. Mexico operations
generated the remaining 6.8% of net sales.

Bloomberg News' Bill Rochelle notes that the year's results
included a $501 million goodwill impairment charge.

In December 2006, the company acquired a majority of the
outstanding common stock of Gold Kist Inc., and subsequently
acquired the remaining stock.  In November 2003, it completed the
purchase of all the outstanding stock of ConAgra Foods, Inc.'s
chicken division.

A copy of the Form 10-K is available for free at:

       http://researcharchives.com/t/s?3647

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico.  In addition, the company owns 34
processing plants in the United States and 3 processing plants
n Mexico.  The processing plants are supported by 42 hatcheries,
31 feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States.  The company employs about 40,000
people and has major operations in Texas, Alabama, Arkansas,
Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania,
Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with
other facilities in Arizona, Florida, Iowa, Mississippi and Utah.

Pilgrim's Pride Corporation and six other affiliates filed Chapter
11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case
No. 08-45664).  Pilgrim's Pride has engaged Stephen A. Youngman,
Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil,
Gotshal & Manges LLP, as bankruptcy counsel.  The Debtors have
also tapped Baker & McKenzie LLP as special counsel.  Lazard
Freres & Co., LLC is the company's investment bankers and William
K. Snyder of CRG Partners Group LLC as chief restructuring
officer.  The company's claims and noticing agent is Kurtzman
Carson Consulting LLC. Pilgrim's Pride had total assets of
$3,847,185,000, and debts of $2,700,139,000 as of June 28, 2008.

A nine-member committee of unsecured creditors has been appointed
in the case.

(Pilgrim's Pride Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


PILGRIM'S PRIDE: Seeks to Pay Amounts Owed to Employees
-------------------------------------------------------
Pilgrim's Pride Corp. and its affiliated debtors seek approval
from the U.S. Bankruptcy Court for the Northern District of Texas
to pay prepetition amounts owed to their employees.

In connection with the Debtors' domestic operations, Pilgrim's
Pride employs about 43,000 individuals in the United States.
Majority of those employees are compensated on an hourly basis,
consisting of:

  -- 24,236 full-time non-bargaining unit employees,
  -- 13,165 are full-time bargaining unit employees,
  -- two temporary NBU interns,
  -- 62 part-time NBU employees,
  -- two part-time BU employees, and
  -- 48 are temporary NBU employees.

Pilgrim's Pride also employs individuals on a salaried basis,
consisting of (a) 3,765 full-time exempt employees, (b) 1,763
salaried non-exempt full-time employees, (iii) nine SNE part-time
employees, and (iv) four SNE temporary employees.

Additionally, 43 employees, 12 of whom are employed on an hourly
basis, are eligible to receive commissions, in addition to their
pay.

According to Stephen Young, Esq., proposed counsel to the
Debtors, at Weil, Gotshal & Manges LLP, in Dallas Texas, the
Debtors' continued operation of their businesses and their
successful reorganization depends largely on the retention of the
services of their employees and the maintenance of employee
morale and cooperation.  Consequently, it is critical that the
Debtors be authorized to satisfy their employee-related
obligations and continue their ordinary course employee plans,
policies, and programs in effect as of the Petition Date, he
says.

As of November 28, 2008, the Debtors estimate that the
outstanding prepetition employee obligations aggregate about
$74,970,000, including:

  Wage Obligations                        $31,750,000
  Commission Obligations                       17,500
  Payroll Taxes and Benefit Deductions      7,700,000
  Garnishments                                344,000
  Medical, Dental and Vision Plans         42,000,000
  Basic Life, AD&D, etc.                       10,100
  Short-term Disability Coverage              245,400
  Long-Term Disability Coverage                   800
  401(k) Plan                                 150,000
  Service Awards                               27,000
  Tuition Reimbursement Program               370,000
  Car Allowance Program                        17,150
  Relocation Reimbursement Plan                 1,100
  Severance Plan                              246,000
  Employee Monthly Stock Investment Plan       66,200
  Deferred Compensation Plan                    4,200
  Legacy Gold Kist Employee Plans              30,800

A summary of the Employee Obligations is available for free at:

http://bankrupt.com/misc/EmployeeObligations_112808.pdf

The outstanding Employee Obligations with respect to each
Employee for the period prior to the Petition Date, do not exceed
the $10,950 cap under Section 507(a)(4) of the Bankruptcy Code,
the Debtors maintain.

The Debtors, accordingly, sought and obtained the Court's
authority to pay their current employees for work performed
prepetition and to honor certain prepetition employee-related
obligations and benefits and to continue administering their
employer programs and plans in the ordinary course of the
Debtors' business.

In line with the request, the Debtors ask the Court to authorize
and direct applicable banks to receive, process, honor and pay
any and all checks, electronic fund transfers, and automatic
payroll transfers drawn on the Debtors' payroll and general
disbursement accounts to the extent that the checks or transfers
relate to any of the prepetition employee obligations.

Mr. Youngman asserts that absent the requested relief, the
employees will suffer undue hardship, and in many instances,
serious financial difficulties, as the Employees need those
amounts to meet their own personal financial obligations.

The Court granted the Debtors' request on condition that no
insider of the Debtors may be paid pursuant to Incentive
Agreements, and provided that approval of the payments under the
Incentive Agreements will be without prejudice to the Official
Committee of Unsecured Creditors appointed in the Debtors' cases
to file a motion for reconsideration of the granting of the
request.

                   About Pilgrim's Pride

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico.  In addition, the company owns 34
processing plants in the United States and 3 processing plants
n Mexico.  The processing plants are supported by 42 hatcheries,
31 feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States.  The company employs about 40,000
people and has major operations in Texas, Alabama, Arkansas,
Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania,
Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with
other facilities in Arizona, Florida, Iowa, Mississippi and Utah.

Pilgrim's Pride Corporation and six other affiliates filed Chapter
11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case
No. 08-45664).  Pilgrim's Pride has engaged Stephen A. Youngman,
Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil,
Gotshal & Manges LLP, as bankruptcy counsel.  The Debtors have
also tapped Baker & McKenzie LLP as special counsel.  Lazard
Freres & Co., LLC is the company's investment bankers and William
K. Snyder of CRG Partners Group LLC as chief restructuring
officer.  The company's claims and noticing agent is Kurtzman
Carson Consulting LLC. Pilgrim's Pride had total assets of
$3,847,185,000, and debts of $2,700,139,000 as of June 28, 2008.

(Pilgrim's Pride Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


PLCP LP: Files for Chapter 11 After Ethanol Production Halt
-----------------------------------------------------------
McClatchy-Tribune reports that Pine Lake Corn Processors has filed
for Chapter 11 protection in the U.S. Bankruptcy Court in the
Northern District of Iowa, a week after suspending ethanol
production.

According to McClatchy-Tribune, the 30 million-gallon-per-year
ethanol plant near Steamboat Rock stopped production on Dec. 1.

Court documents say that Pine Lake listed about $12.7 million in
debts to its 20 largest creditors.  Richard Updegraff at Des
Moines-based Brown Winick law firm, which represents Pine Lake,
said that a detailed report on the company's long-term debt will
be filed in the Court later this month, McClatchy Tribune states.
According to the report, most of the debt is owed to Prairie Land
Cooperative of Hubbard, which holds an almost $9.4 million claim
against the debtor.

Bill Hanigan, the attorney for Pine Lake, said in a statement that
he is confident that the plant will resume production as soon as
cash flow and supply issues are resolved.

Steamboat Rock, Iowa-based PLCP, L.P., Pine Lake's general
partner, filed for Chapter 11 protection on Dec. 4, 2008 (Bankr.
N. D. Iowa Case No. 08-02680).  Bradley R. Kruse, Esq., who has an
office at Des Moines, Iowa, represents the company in its
restructuring effort.  The company listed assets of $10,000,000 to
$50,000,000 and debts of $10,000,000 to $50,000,000.


PLY GEM: S&P Cuts Corporate Credit Rating to 'B-'; Outlook Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Cary, North Carolina-based Ply Gem Industries Inc. to
'B-' from 'B'.  All ratings were removed from CreditWatch, where
they had been placed with negative implications on Nov. 20, 2008.
The outlook is negative.

"The downgrade and negative outlook reflect Ply Gem's weaker
overall financial profile resulting from the ongoing downturn in
new residential construction and repair and demand for
remodeling," said S&P's credit analyst Thomas Nadramia.  "They
also reflect our expectation that these markets will remain weak
well into 2009.  The company's credit metrics have deteriorated to
a level no longer consistent with the prior rating."

About 45% of Ply Gem's sales are to less-cyclical repair and
remodeling activity, which provides some stability.  Furthermore,
nearly 75% of Ply Gem's cost structure is variable, providing the
company with operating flexibility in periods of reduced demand.
Still, operating results are vulnerable to intense price
competition, changes in raw-material costs -- primarily for PVC
resin and aluminum -- and poor weather.

Mr. Nadramia said, "We expect end-market demand for Ply Gem's
siding and window products to remain weak in 2009 because of
reduced new construction activity and declines to low double
digits in repair and remodeling spending.  S&P could downgrade the
ratings if worse-than-expected construction activity reduces
operating cash flow to a level below the company's cash interest
expense, requiring Ply Gem to use its $150 million asset-based
revolving credit facility for debt service.  Specifically, if
revenues were to decline by 6% and margins contract by an
additional 100 basis points, the company would likely generate
negative cash flow, necessitating increased debt."


POWDER RIVER: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Powder River Petroluem International, Inc.
        Suite 2900, Oklahoma Tower
        210 Park Avenue
        Oklahoma City, OK 73102

Bankruptcy Case No.: 08-15613

Chapter 11 Petition Date: December 12, 2008

Court: Western District of Oklahoma (Oklahoma City)

Judge: Niles L. Jackson

Debtor's Counsel: Mark A. Craige, Esq.
                  mark@law-office.com
                  Morrel, Saffa, Craige, Hicks, et al.
                  3501 S Yale Ave.
                  Tulsa, OK 74135
                  Tel: (918) 664-0800
                  Fax: (918) 663-1383

Total Assets: $1,902,582

Total Debts: $57,412,349

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
Americo Energy Resources LLC   -                 $5,025,000
McFadden Ranch
7575 San Filipe St., #200
Houston, TX 77063

Oilpods.Com                    -                 $2,910,419
8 Temasek Boulevard, #22-02
Suntec Tower
Singaapore 38988

Department of the Treasury     -                 $2,627,283
Internal Revenue Service
Cincinnati, OH 45999-0039

Magnus Oil & Gas               -                 $1,890,197

Mark Cook                      -                 $497,283

Brian Fox                      -                 $466,250

Day, Edwards, Popester &       -                 $329,506
Chirstensen, P

Goliad Energy                  -                 $250,000

Davis & Cannon, LLP            -                 $187,412

Woodrum, Kemendo, Tate &       -                 $151,170
Westemeir

Varilease Finance, Inc.        -                 $140,253

BRI Consulting Group, Inc.     -                 $51,017

Chisholm, Bierolf & Nilson     -                 $50,497

Damion Oil, Inc. (Two Bayous)  -                 $50,229

K-3 Services                   -                 $44,864

Hein Contracting Inc.          -                 $44,090

Hertz Equipment Rental         -                 $33,494
Corporation

Brammer Pipe and Steel, Inc.   -                 $32,453

John J. Vanya, Jr.             -                 $31,383

CK Power Products Corp.        -                 $31,155

The petition was signed by Bruce W. Day, receiver of the company.


PRIMEDIA INC: S&P Downgrades Rating on $350 Mil. Facility to 'BB-'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue-level rating
on Norcross, Georgia-based PRIMEDIA Inc.'s $350 million secured
credit facility to 'BB-' (at the same level as the 'BB-' corporate
credit rating on the company) from 'BB'.  In addition, S&P revised
the recovery rating on this debt to '3', indicating S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default, from '2'.  The credit facilities consist of a
$250 million term loan B due 2014 and a $100 million revolving
credit facility due 2013.

S&P's revision of the recovery rating reflects a slightly lower
enterprise value under S&P's default analysis than S&P had
previously used, as S&P has lowered its emergence EBITDA multiple
to 5.5x from 6.0x.  This is based on S&P's assumption that
providers of exit financing, even in S&P's simulated default year
of 2011, could mandate a capital structure with lower debt
leverage than we've historically seen.  As a result, S&P's default
scenario assumes a smaller number of potential buyers, which, in
conjunction with declining business fundamentals, results in
downward pressure on the resale multiple.

The corporate credit rating on PRIMEDIA remains at 'BB-', and the
rating outlook is stable.  The rating reflects:

  -- The exposure of the company's rental apartment advertising
     publications to rental occupancy rates and new construction
     in the apartment real estate sector,

  -- Risks from the migration of real estate advertising to the
     Internet,

  -- The cyclical nature of its home guides and distribution
     business, and

  -- The company's narrower business base following the August
     2007 sale of its specialty magazine business.

These factors are only partially moderated by:

  -- The company's established position in the consumer rental and
     home sale guides publishing segment,

  -- Its good geographic diversity and population reach through
     its proprietary distribution network, and

  -- Its relatively healthy pro forma credit metrics following its
     third-quarter 2007 refinancing.

                           Ratings List

                           PRIMEDIA Inc.

                                     Rating
                                     ------
          Corporate Credit Rating    BB-/Stable/--

                                  Revised Ratings

                                     To          From
                                     --          ----
          Senior Secured             BB-         BB
            Recovery Rating          3           2


PRIMUS GUARANTY: S&P Junks Long-Term Counterparty Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its long-
term counterparty credit rating on Primus Guaranty Ltd. to 'CCC'
from 'BB'.  The outlook is negative.

"The downgrade reflects our concern for the potential of
diminishing cash flows from Primus Financial Products LLC, the
derivatives product company.  The DPC's viability as a
counterparty to write credit-default swaps business was imperative
for the company's subsistence, because Primus relies on revenue
streams generated principally by the DPC for its profitability and
debt service," said S&P's credit analyst Dan Teclaw.

On Dec. 10, 2008, S&P downgraded PFP to 'AA-' from 'AA+'
reflecting further weakness in PFP's credit derivative portfolio.
S&P is also uncertain as to the outcome of the settlement of
Primus' swaps with Lehman Brothers Special Financing Inc. (the
counterparty).  PFP had $1.4 billion in notional single-name
contracts with Lehman.

The credit derivative market has dramatically pulled back and this
is reflected in the shrinking notional amounts outstanding
reported by the British Bankers Association.  In this environment,
it will be even more challenging for PFP to write more credit
derivative protection because it does not post collateral.  Thus
PFP represents a static portfolio whose revenue stream will
decline as it considers hedging or other risk-mitigation
transactions in this challenging credit environment.

The DPC is currently amortizing and has not written any new
business since third-quarter 2008, as it does not post collateral
and, therefore, has not been considered a viable counterparty in
this market.  Primus, then, represents a static portfolio that can
only lose dividend capacity as it considers hedging or other risk-
mitigation transactions in this challenging credit environment.

As S&P expected in these economic conditions, corporate defaults
are increasing and having a direct bearing on the company's
economic results.  Until recently, S&P were of the opinion that
much of the deterioration in GAAP earnings was attributable to
market sentiment in spread widening as opposed to actual credit
deterioration.  S&P now believes escalating corporate defaults
will affect the company's economic results and have a more
immediate impact on profitability, liquidity, and capital at PFP,
and ultimately reduce cash flows to Primus.

The outlook is negative.  S&P will monitor credit events to see
how they affect the company's liquidity and capital.  There is no
upward potential for the counterparty rating because no new
additions to cash flow streams are occurring.  If corporate
defaults continue to manifest themselves in even higher credit
events for the DPC, S&P could lower its rating on PGL farther.


PROGENICS PHARMACEUTICALS: To Cure Nasdaq Listing Non-Compliance
----------------------------------------------------------------
Progenics Pharmaceuticals, Inc., received a Nasdaq Staff
Deficiency Letter indicating that it fails to comply with Nasdaq's
audit committee requirements.  As a result of Paul F. Jacobson's
resignation from the company's board of directors, the company's
audit committee has only two members, both of whom are independent
directors.  Nasdaq Marketplace Rule 4350 requires a Nasdaq listed
company to have an audit committee with at least three members,
all of whom must be independent.

The company intends to regain compliance with this requirement
within the cure period provided by Nasdaq rules, and has begun the
process of seeking a qualified candidate to serve on its audit
committee.

During this period, the company's common stock will continue to
trade on Nasdaq subject to continued compliance with other listing
requirements.

Nasdaq Marketplace Rule 4350(d)(4) provides a cure period for
restoring compliance with the audit committee requirements.  In
the company's case, the period extends until the company's next
annual shareholders' meeting, which is expected to be held in June
2009.  If the company were not to name a new independent Audit
Committee member in this timeframe, Nasdaq could begin proceedings
to delist its shares.

               About Progenics Pharmaceuticals, Inc.

Headquartered in Tarrytown, New York, Progenics Pharmaceuticals,
Inc. (NASDAQ:PGNX) -- http://www.progenics.com/-- is a
biopharmaceutical company focusing on the development and
commercialization of innovative therapeutic products to treat the
unmet medical needs of patients with debilitating conditions and
life-threatening diseases.  Principal programs are directed toward
gastroenterology, virology -- including human immunodeficiency
virus (HIV) and hepatitis C virus (HCV) infections -- and
oncology.


PULTE HOMES: Fitch Downgrades Issuer Default Rating to 'BB+'
------------------------------------------------------------
Fitch Ratings has downgraded Pulte Homes, Inc.'s Issuer Default
Rating and outstanding debt ratings:

  -- IDR to 'BB+' from 'BBB-';
  -- Senior unsecured to 'BB+' from 'BBB-';
  -- Unsecured bank credit facility to 'BB+' from 'BBB-'.

The Rating Outlook remains Negative.

The downgrade reflects the current very difficult housing
environment and Fitch expectations that housing activity will be
even more challenging than previously anticipated throughout
calendar 2009.  The recessionary economy and impaired mortgage
markets are, of course, contributing to the housing shortfall.
The ratings changes also reflect negative trends in PHM's
operating margins, further deterioration in credit metrics
(especially interest coverage and debt/EBITDA ratios) and erosion
in tangible net worth from non-cash real estate charges.  However,
PHM's liquidity position provides a buffer and supports the new
ratings.  Fitch notes there is potential for lower cash flow from
operations next year relative to fiscal 2008.

Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as land
and development spending, general inventory levels, speculative
inventory activity (including the impact of high cancellation
rates on such activity), gross and net new order activity, debt
levels and free cash flow trends and uses.

PHM's rating is based on the company's broad geographic and
product diversity and a long track record of adhering to a
disciplined financial strategy.  PHM's Del Webb (active adult)
segment is perhaps the best-recognized brand name in the
homebuilding business and continues to outperform the company's
traditional housing segment.

PHM controls roughly a 5.3-year supply of land based on latest 12
months home deliveries, 85.8% of which are owned and the balance
controlled through options.  (The options share of total lots
controlled is down sharply over the past two years as the company
has written off substantial numbers of options.)

PHM's liquidity remains healthy and provides flexibility.  PHM
ended the third quarter of 2008 with $1.17 billion of cash on the
balance sheet and no borrowings under its $1.6 billion revolving
credit facility.  Subsequently, PHM amended its credit facility
to, among other things, reduce the aggregate commitment from
$1.6 billion to $1.2 billion, modify tangible net worth and
leverage covenants and establish a liquidity reserve requirement
if the company's interest coverage falls below 2.0 times.  PHM
generated $280 million of cash flow from operations during the
third quarter of fiscal year 2008 and has generated $1.66 billion
of cash flow during the last twelve months.

PHM has an established track record of financial discipline as
leverage remained below 45% (on an annual basis) for the past
sixteen years.  However, the erosion of shareholder's equity from
non-cash real estate charges has led to untypically high leverage.

As of Sept. 30, 2008, PHM's leverage as measured by debt to
capitalization was 51% and its net debt to capitalization was 41%.
PHM's long term targeted leverage range is 35-45%.  Management is
in position to adapt to changes in economic conditions without
exposing creditors to increased risks, given PHM's operational
profile and financial flexibility.


QUANTUM CORPORATION: Moody's Reviews 'B3' Ratings for Likely Cuts
-----------------------------------------------------------------
Moody's Investors Service has placed Quantum Corporation's ratings
on review for possible downgrade.  The review was prompted by
concerns about the company's ability to retain sufficient
liquidity in light of the potential accelerated maturity of the
remaining $250 million senior secured term loan in February 2010.
While the term loan matures on July 12, 2014, it is subject to
accelerated maturity if the company does not repay, refinance, or
convert into equity (deemed unlikely given the conversion price of
$4.35 per share) $135 million of its existing $160 million of
convertible subordinated notes prior to February 1, 2010.

The review will focus on the company's prospective ability to
satisfy this potentially accelerated debt maturity and prospects
for improving its cash position by increasing free cash flow in
the midst of the current economic downturn and/or potentially
selling certain assets, business lines, or the company as a whole,
if necessary.  The review will also assess the company's ability
to access capital markets, implement additional restructuring
programs, manage working capital needs, and maintain compliance
with its financial maintenance covenants, which step down on
March 30, 2009.

Ratings on review for possible downgrade (note that LGD
Assessments and point estimates are subject to change pending
conclusion of the rating review) are:

  -- Corporate Family Rating, B3;

  -- Probability-of-default rating, B3;

  -- $50 million senior secured revolver expiring 2012, B1 (LGD 3,
     32%);

  -- $400 million senior secured first lien facility due 2014
     (remaining balance of $250 million), B1 (LGD 3, 32%);

  -- $160 million subordinated convertible notes due 2010, Caa2
     (LGD 6, 91%)

The last rating action for Quantum Corporation was on June 18,
2007, when Moody's affirmed the company's B3 Corporate Family
Rating and assigned a B1 rating to its $50 million senior secured
revolver (expiring 2012) and $400 million term loan (due 2014).

With $919 million in revenues for the twelve months ended
September 30, 2008, Quantum Corporation, headquartered in San
Jose, California, is a leading global data storage company
offering a broad portfolio of disk-based
deduplication/replication, tape and software products for backup,
recovery and archive.


QUESTEX MEDIA: Shortfall in Revenue Cues Moody's Junk Ratings
-------------------------------------------------------------
Moody's Investors Service downgraded Questex Media Group, Inc.'s
Corporate Family Rating and Probability of Default Rating to Caa1
from B3 and lowered the rating on the first lien senior secured
credit facility to B2 from B1.  Concurrently, the outlook was
changed to negative from stable.

The downgrade to Caa1 and change in outlook were prompted by a
shortfall in third quarter revenue and operating results compared
to Moody's previous expectations, stemming mostly from Questex's
advertising-based publications business.  Meanwhile, a debt-
financed acquisition in January 2008 along with earn-out payments
made in the second and third quarters has led to a significant
increase in outstanding debt levels and a deterioration in
liquidity.  The negative outlook further reflects macroeconomic
and industry-wide trends that continue to affect end market demand
for advertising spend and Moody's concern that current conditions
could lead to further declines in Questex's operating results.

The Caa1 rating reflects Questex's very high financial leverage of
approximately nine times, a relatively small revenue base, and a
weak liquidity profile.  Management has begun implementing sizable
cost-containment measures to offset revenue declines expected in
the near term.  Nonetheless, Moody's expects 2009 cash flow to be
negative after consideration of estimated earn-out payments due to
former owners.  With only $6 million of availability on the
revolver at September 30, 2008, any additional deterioration in
liquidity could lead to a downgrade.

The ratings are supported by the diversification of the company's
products and customers, low maintenance capital spending
requirements, and the contribution of the trade show / expositions
segment that, so far, has experienced a less pronounced decline in
results.  The company's trade shows generate higher margins than
its print publications segment and bookings are typically
contracted well in advance of the event, which provides some
visibility into future revenues.  Therefore a material decline in
trade show revenues, most of which are generated in the first five
months of the year, would likely lead to further downgrade.

Moody's downgraded these ratings:

  -- $30 million first lien revolving credit facility due 2012, to
     B2 / LGD3(30%) from B1 / LGD3(32%)

  -- $148 million first lien term loan due 2014, to B2 / LGD3(30%)
     from B1 / LGD3(32%)

  -- Corporate Family Rating, to Caa1 from B3

  -- Probability of Default Rating, to Caa1 from B3

These rating was affirmed:

  -- $55 million second lien term loan due 2014, Caa2 / LGD5(78%)
     from Caa2 / LGD5(82%)

Moody's does not rate $37 million of payment-in-kind senior notes
issued by Questex's parent, QMG Holdings, Inc.

Questex's ratings were assigned by evaluating factors Moody's
believe are relevant to the credit profile of the issuer, such as
i) the business risk and competitive position of the company
versus others within its industry, ii) the capital structure and
financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv)
management's track record and tolerance for risk.  These
attributes were compared against other issuers both within and
outside Questex's core industry and Questex's ratings are believed
to be comparable to those of other issuers of similar credit risk.
The previous rating action occurred on August 13, 2007 when
Moody's assigned a first-time CFR of B3.

Questex Media Group, Inc. is a diversified business-to-business
integrated media and information provider headquartered in Newton,
Massachusetts.  Questex serves multiple industries including
technology, telecommunications, beauty, spa, travel, hospitality,
leisure, abilities, home entertainment, landscape design, building
services and natural resources.  The company's properties include
over 100 print and digital media publications, 45
conferences/trade shows/events, and a range of research, data and
information products.  For the twelve months ended September 30,
2008, pro forma revenues were approximately $145 million.


QSOUND LABS: Has Until Dec. 23 to Submit Nasdaq Compliance Plan
---------------------------------------------------------------
QSound Labs, Inc., received from The Nasdaq Stock Market a letter
indicating that the company is not in compliance with the
stockholders' equity, market value of publicly held shares and
total asset and revenue requirements for continued listing on The
Nasdaq Capital Market as set forth in Nasdaq Marketplace Rules
4310 (c)(3)(A), 4310 (c)(3)(B) and 4310 (c)(3)Copyright.

The company has been requested, and intends to, submit a specific
plan to achieve and sustain compliance with The Nasdaq Capital
Market listing requirements on or before Dec. 23, 2008, including
the time frame for completion of the plan.  If the staff of The
Nasdaq Stock Market determines that the company's plan does not
adequately address the failure to comply with the listing
requirements, the Staff will provide written notification that the
company's securities will be delisted.  At that time, the company
may appeal the Staff's decision to a Nasdaq Listings
Qualifications Panel.

Headquartered in Alberta, Canada, QSound Labs, Inc. (NASDAQ:QSND)
--http://www.qsound.com/-- is an audio technology company.  Since
its inception in 1988, the company has developed proprietary audio
solutions that include virtual surround sound, positional audio
and stereo enhancement for the mobile devices, consumer
electronics, PC/multimedia, and Internet markets.


RACE POINT: Fitch Downgrades Ratings on Seven Classes of Notes
--------------------------------------------------------------
Fitch Ratings affirms two and downgrades seven classes of notes
issued by Race Point II CLO, Ltd./Inc. (Race Point II).
Additionally, Fitch assigns outlooks to all nine classes.  These
rating actions are effective immediately:

  -- $402,000,000 class A-1 affirmed at 'AAA'; Outlook Stable;

  -- $15,000,000 class A-2 affirmed at 'AA+'; Outlook Stable;

  -- $15,000,000 class B-1 downgraded to 'BBB+' from 'A'; Outlook
     Stable;

  -- $38,000,000 class B-2 downgraded to 'BBB+' from 'A'; Outlook
     Stable;

  -- $12,000,000 class C-1 downgraded to 'BB' from 'BBB'; Outlook
     Stable;

  -- $5,000,000 class C-2 downgraded to 'BB' from 'BBB'; Outlook
     Stable;

  -- $3,500,000 class D-1 downgraded to 'B' from 'BB+'; Outlook
     Stable;

  -- $3,000,000 class D-2 downgraded to 'B' from 'BB+'; Outlook
     Stable;

  -- $4,000,000 class D-3 downgraded to 'B' from 'BB+'; Outlook
     Stable.

The rating actions reflect Fitch's view on the credit risk of the
rated notes following the release of its new Corporate CDO rating
Criteria.

Race Point II is a cash flow collateralized loan obligation that
closed in April 2003 and is managed by Sankaty Advisors, LLC.
Race Point II is currently in its reinvestment period which will
end in May 2009.  The portfolio is comprised of 90.4% senior
secured loans, 2.7% second lien loans and 7.0% senior unsecured or
subordinated debt.  The four largest Fitch industry concentrations
in Race Point II are gaming, leisure & entertainment (9.8%),
broadcasting & media (8.9%), chemicals (7.6%) and automobiles
(7.5%).  The five largest obligors represent approximately 11% of
the portfolio and the single largest obligor accounts for
approximately 2.5% of the portfolio.

The class A-1 and A-2 notes are affirmed due to their senior
position in the capital structure.  The credit enhancement
provided by the subordinated tranches and the structural
protection of the class A overcollateralization test sufficiently
protect the notes from peak default stresses on the portfolio.

The downgrades to the class B-1 and B-2 notes (collectively, class
B), class C-1 and C-2 notes (collectively, class C) and class D-1,
D-2 and D-3 notes (collectively, class D) incorporate the negative
credit migration in the portfolio.  According to the latest
trustee report, the average credit quality of the portfolio is 'B-
' versus a covenant of 'B+/B'.  Approximately 11.4% and 30.7% of
the portfolio is on Rating Watch Negative or has a Negative
Outlook, respectively, by at least one rating agency, which was
factored into the analysis by making standard adjustments as
described in Fitch's updated corporate CDO criteria.  Overall,
26.1% of the portfolio is considered rated 'CCC+' or lower.
Defaulted securities account for 1.8% of the portfolio.  While the
portfolio has experienced limited defaults to date, the downgrade
reflects the credit support available to the class B, C and D
notes relative to the composition of the portfolio, including the
amount of relatively low rated assets and the level of exposure to
weakened sectors, as well as Fitch's collateral performance
expectations.  The current rating levels reflect the actual
portfolio credit deterioration, as well as anticipated rating
migration indicated by large portions of the portfolio with a
Negative Outlook or Watch status.  Accordingly, Fitch's Outlook
for the notes is Stable for the next one to two years.

The ratings of the class A-1 and class A-2 notes address the
likelihood that investors will receive full and timely payments of
interest per the transaction's governing documents, as well as the
stated balance of principal by the legal final maturity date.  The
ratings of the class B, C, and D notes address the likelihood that
investors will receive ultimate and compensating interest payments
per the transaction's governing documents, as well as the stated
balance of principal by the legal final maturity date.

Fitch released updated criteria on April 30, 2008 for Corporate
CDOs and, at that time, noted it would be reviewing its ratings
accordingly to establish consistency for existing and new
transactions.  As part of this review, Fitch makes standard
adjustments for any names on Rating Watch Negative or Outlook
Negative, reducing such ratings for default analysis purpose by
two and one notch, respectively..

Fitch introduced Rating Outlooks for U.S. structured finance in
September 2008 to provide investors with forward-looking analysis
for a structured finance tranche's credit performance.  Fitch's
Rating Outlook indicates the likely direction of any rating change
over a one- to two-year period and may be Positive, Negative,
Stable or, occasionally, Evolving.


RACE POINT: Fitch Affirms Ratings on Eight Classes of Notes
-----------------------------------------------------------
Fitch Ratings affirms and assigns outlooks to eight classes of
notes issued by Race Point CLO, Ltd./Inc.  These rating actions
are effective immediately:

  -- $123,826,475 class A-1 affirmed at 'AAA'; Outlook Stable;
  -- $71,000,000 class A-2 affirmed at 'AA-'; Outlook Stable;
  -- $10,000,000 class B-1 affirmed at 'A-'; Outlook Stable;
  -- $12,000,000 class B-2 affirmed at 'A-'; Outlook Stable;
  -- $20,000,000 class C affirmed at 'BBB'; Outlook Stable;
  -- $15,500,000 class D-1 affirmed at 'BB-'; Outlook Stable;
  -- $2,000,000 class D-2 affirmed at 'BB-'; Outlook Stable;
  -- $3,500,000 class D-3 affirmed at 'BB-'; Outlook Stable.

The rating actions reflect Fitch's view on the credit risk of the
rated notes following the release of its new Corporate CDO rating
Criteria.

Race Point is a cash flow collateralized loan obligation that
closed in November 2001 and is managed by Sankaty Advisors, LLC.
The reinvestment period ended in May 2007 and the notes are
currently amortizing.  The portfolio is comprised of 88.7% senior
secured loans, 3.2% second lien loans and 8.1% senior unsecured or
subordinated debt.  The four largest industry concentrations in
Race Point are gaming, leisure & entertainment (11.2%),
automobiles (10.6%), chemicals (9.1%) and broadcasting & media
(8.4%).  The five largest obligors represent approximately 11% of
the portfolio and the single largest obligor accounts for
approximately 2.5% of the portfolio.

The current average credit quality of the portfolio is 'B-'.
Approximately 10% and 30.9% of the portfolio is on Rating Watch
Negative or has a Negative Outlook, respectively, by at least one
rating agency, which was factored into the analysis by making
standard adjustments as described in Fitch's updated Corporate CDO
criteria.  Overall, approximately 27.7% of the portfolio is
considered rated 'CCC+' or lower.  That said, all the
overcollateralization ratios are significantly above their current
triggers as well as their levels at closing.  Furthermore, the
portfolio has experienced limited defaults since inception with
defaulted securities currently representing 1.5% of the portfolio.

The affirmations are the result of increased credit enhancement
for all the rated classes of notes despite the moderate credit
deterioration in the portfolio.  The increase in credit
enhancement available to the rated notes reflects the deleveraging
of the class A-1 notes.  Following the most recent payment in
November 2008, the class A-1 had received a cumulative
$203.2 million, representing 62.1% of the initial notional.  The
Stable Outlook assigned to the notes reflects the ability of the
increased credit enhancement to mitigate some of the risk
associated with the relatively low rated assets and the exposure
to weakened sectors in the portfolio.

The ratings of the class A-1 and A-2 notes address the likelihood
that investors will receive full and timely payments of interest
per the transaction's governing documents, as well as the stated
balance of principal by the legal final maturity date.  The
ratings of the class B-1, B-2, C, D-1, D-2 and D-3 notes address
the likelihood that investors will receive ultimate and
compensating interest payments per the transaction's governing
documents, as well as the stated balance of principal by the legal
final maturity date.

Fitch released updated criteria on April 30, 2008 for Corporate
CDOs and, at that time, Fitch noted it would be reviewing its
ratings accordingly to establish consistency for existing and new
transactions.  As part of this review, Fitch makes standard
adjustments for any names on Rating Watch Negative or Outlook
Negative, reducing such ratings for default analysis purpose by
two and one notch, respectively

Fitch introduced Rating Outlooks for U.S. structured finance in
September 2008 to provide investors with forward-looking analysis
for a structured finance tranche's credit performance.  Fitch's
Rating Outlook indicates the likely direction of any rating change
over a one- to two-year period and may be Positive, Negative,
Stable or, occasionally, Evolving.


RELIANT ENERGY: Breakup Fee Appeal Survives Sale of Property
------------------------------------------------------------
While Reliant Energy Inc. has obtained confirmation of its Chapter
11 plan, a $15 million appeal remains outstanding.

According to Bloomberg News' Bill Rochelle, Kelson Energy Inc.,
the independent power producer that lost the auction for Reliant's
830-megawatt Channelview power plant near Houston, defeated the
company's motion asking the U.S. District Court in Delaware to
dismiss Kelson's appeal of a decision of the Bankruptcy Court
denying Kelson a $15 million breakup fee.

The issue on appeal, Mr. Rochelle relates, was whether Kelson
filed its appeal too late.  Reliant argued Kelson should have
appealed when the Bankruptcy Court approved bidding procedures and
denied Kelson a breakup fee.  Kelson took the position an appeal
was not required until the bankruptcy judge later approved the
sale.

U.S. District Judge Joseph Farnan in Wilmington, Delaware handed
down his opinion on Dec. 9, agreeing with other courts that an
appeal on a denied breakup fee need not be taken until the
Bankruptcy Court approves the sale.  Judge Farnan noted there
would have been no need for appeal had Kelson won the auction.
Farnan also said he couldn't conclude that paying a $15 million
breakup fee would have had a "significant impact" on the estate
when the sale in July for $500 million was paying creditors in
full.

Having denied the motion to dismiss the appeal, Judge Farnan will
next decide the case on the merits and determine if Kelson is
entitled to the $15 million, Bloomberg states.

The appeal is Kelson Channel View LLC v. Reliant
Energy Channel View LP (In re Reliant Energy Channelview LP),
08-409, U.S. District Court, District of Delaware (Wilmington).

As reported by yesterday's Troubled Company Reporter, also citing
Bloomberg News, Reliant Energy's joint plan of liquidation became
effective and it emerged from Chapter 11 protection.  The Plan is
built upon the sale of the Debtor's business to GIM Channelview
Cogeneration, LLC.  The Debtors and GIM entered into an GIM asset
purchase agreement, wherein GIM did not provide for the assumption
and assignment of the Second Amended Restated Cash Flow
Participation Agreement (CFPA) between the Debtors and Equistar
Chemicals LP.  The purchase price under the GIM APA was $500
million.  The proceeds of the proposed GIM APA were sufficient to
pay all creditor claims in full and provide a recovery to interest
holders.

            About Reliant Energy Channelview

Based in Houston, Reliant Energy Channelview L.P. owns a power
plant located near Houston, and is an indirect wholly owned
subsidiary of Reliant Energy Inc. -- http://www.reliant.com/--
The company and its three affiliates, Reliant Energy Channelview
(Texas) LLC, Reliant Energy Channelview (Delaware) LLC, and
Reliant Energy Services Channelview LLC filed for chapter 11
protection on Aug. 20, 2007 (Bankr. D. Del. Lead Case No.
07-11160).  Jason M. Madron, Esq., Lee E. Kaufman, Esq., Mark D.
Collins, Esq., Paul Noble Heath, Esq., Richards, Robert J. Stearn
Jr., Esq., at Layton & Finger P.A., and Timothy P. Cairns,
Pachulski Stang Ziehl & Jones represent the Debtors.  The U.S.
Trustee for Region 3 appointed an Official Committee of Unsecured
Creditors in these cases.  David B. Stratton, Esq., and Evelyn J.
Meltzer, Esq., at Pepper Hamiltion LLP, represent the Committee.
When the Debtors filed for protection from their creditors,
they listed total assets of $362,000,000 and total debts of
$342,000,000.


RESIDENTIAL CAPITAL: Fitch Takes Servicer Rating Actions
--------------------------------------------------------
Fitch Ratings has taken these rating actions on Residential
Capital LLC's U.S. residential mortgage servicer ratings:

  -- Primary servicer for prime product downgraded to 'RPS4' from
     'RPS3';

  -- Primary servicer for Alt-A product downgraded to 'RPS4' from
     'RPS3';

  -- Primary servicer for subprime product downgraded to 'RPS4'
     from 'RPS3-';

  -- Primary servicer for HLTV product downgraded to 'RPS4' from
     'RPS3-';

  -- Primary servicer for HE/HELOC product downgraded to 'RPS4'
     from 'RPS3-';

  -- Primary specialty-subservicer downgraded to 'RPS4' from
     'RPS3';

  -- Special servicer downgraded to 'RSS4' from 'RSS3-';

  -- Master servicer downgraded to 'RMS4' from 'RMS3-'.

Fitch also removes the servicer ratings from Rating Watch
Negative.

Fitch recently completed its operational review of ResCap's
servicing operations and confirmed that the company continues to
perform at a level consistent with the prior year.  The servicer
rating downgrades are due to ResCap's deteriorating financial
condition.  Fitch downgraded ResCap's Issuer Default Rating to 'D'
from 'C' and removed the Rating Watch Negative on June 5, 2008
following completion of the company's distressed debt exchange.
The servicer rating actions reflect the continued pressure on
ResCap's liquidity position and financial flexibility and the
potential impact on the company's servicing operations.  A
company's financial condition is an important component of Fitch's
servicer rating analysis.

As of June 30, 2008, ResCap serviced 3.1 million loans for
$437 billion.  The servicing portfolio was comprised of 14.3% non-
agency prime first and second liens, 9.7% subprime first and
second liens, 8.1% Alt-A, 2.4% HLTV, and 9.5% HELOC products, with
the balance consisting of conventional conforming, FHA, VA, and
manufactured housing loans.  ResCap's master servicing portfolio
was comprised of over 592,000 loans for $119.3 billion.

Fitch will continue to monitor ResCap's financial condition and
its impact on the company's servicing and operational capabilities
and performance.

Fitch rates residential mortgage primary, master, and special
servicers on a scale of 1 to 5, with 1 being the highest rating.
Within some of these rating levels, Fitch further differentiates
ratings by plus and minus as well as the flat rating.


RESIDENTIAL CAPITAL: GMAC Extends Offerings Until December 26
-------------------------------------------------------------
GMAC Financial Services amended and extended its separate private
exchange offers and cash tender offers to purchase and exchange
certain of its and its subsidiaries' and Residential Capital,
LLC's outstanding notes in order to reflect an agreement in
principle reached with representatives of a substantial portion of
the outstanding notes.

This is GMAC Financial's fourth extension of the early delivery
time to provide investors the opportunity to consider the GMAC and
ResCap offers.

GMAC said that the amount of notes covered by the agreement in
principle on the material terms of the offer represents
substantial progress toward attaining the estimated overall
participation that would be required to satisfy the condition for
a minimum amount of regulatory capital in connection with GMAC's
application to become a bank holding company.  However,
significant additional participation will also be required.  In
order for the condition to be satisfied, the estimated overall
participation in the offers would be required to be approximately
75% on a pro rata basis.

The Federal Reserve has informed GMAC that if GMAC is unable to
meet these capital requirements, it will not approve GMAC's
application to become a bank holding company.

GMAC disclosed tha it has extended the early delivery time with
respect to the offers to 5:00 p.m., New York City time, on
Dec. 16, 2008, and extended the expiration date of the offers to
11:59 p.m., New York City time, on Dec. 26, 2008.  The withdrawal
deadline with respect to the offers has not been extended.

The amendments include an increase in the annual dividend rate to
9% (to be reduced to 7% after GMAC shall have raised at least
$2 billion of new Tier 1 capital, $750 million of which is to be
contributed by GMAC's existing shareholders) and the addition of
certain covenants relating to the new guaranteed notes, including
restrictions on liens, subsidiary guarantees and asset sales.

To date, approximately $6.8 billion in aggregate principal amount
or 24% of the outstanding GMAC old notes have been tendered in the
GMAC offers and approximately $2.4 billion in aggregate principal
amount or 25% of the outstanding ResCap old notes have been
tendered in the ResCap offers.  These results do not include the
notes covered by the agreement in principle.

GMAC intends to distribute supplements to the confidential
offering memoranda distributed with respect to the GMAC and ResCap
offers, containing the complete final amendments to the terms and
conditions of the GMAC and ResCap offers.

Global Bondholder Services Corporation, the information agent for
the offers, is available to assist investors with questions
regarding the tender and exchange process or other logistical
issues, at (866) 794-2200 (U.S. Toll-free).  Documents relating to
the offers will only be distributed to holders of the old notes
who complete and return a letter of eligibility confirming that
they are within the category of eligible investors for this
private offer.  Noteholders who desire to obtain a copy of the
eligibility letter should also contact Global Bondholder Services
Corporation.

                         About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.

For three months ended Sept. 30, 2008, the company reported net
loss of $2.5 billion compared to net loss of $1.5 billion for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company incurred net
loss of $5.5 billion compared to $1.6 billion for the same period
in the previous year.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $211.3 billion, total liabilities of $202.0 billion and
members' equity of about $9.3 billion.

                         About ResCap

Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit
of GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.

                           *     *     *

As reported in the Troubled Company Reporter on Dec 3, 2008,
Dominion Bond Rating Service placed all ratings of Residential
Capital, LLC, including its Issuer and Long-Term Debt rating of C,
Under Review with Negative Implications.


RESIX FINANCE: Moody's Downgrades Ratings on 71 Tranches
--------------------------------------------------------
Moody's Investors Service has downgraded the ratings of seventy
one tranches in the RESI / RESIX shelf, and the EASI Finance
Limited Partnership 2007-1 transactions.  The certificates and
notes are protected through subordination, including a non-
amortizing unrated tranche.  The synthetic transaction provides
the owner of a sizable pool of jumbo mortgages credit protection
similar to the credit enhancement provided through subordination
in conventional residential mortgage backed securities
transactions.  The reference portfolio includes prime conforming
and nonconforming balance fixed-rate and adjustable-rate mortgages
purchased from various originators.  The portfolio is generally
static as in most RMBS deals.

Through an agreement with the securities issuer, the Protected
Party pays a fee for the transfer of a portion of the portfolio
risk.  Investors in the securities have an interest in the
holdings of the issuer, which include highly rated investment
instruments, a forward delivery agreement and fee collections on
the agreement with the Protected Party.  Investors are exposed to
risk from the reference portfolio but benefit only indirectly from
cash flows from these assets.

The actions are triggered by higher than anticipated rates of
delinquency, foreclosure, and REO in the underlying collateral
relative to currently available credit enhancement levels.  The
actions listed below reflect Moody's revised expected losses on
the Jumbo sector announced in a press release on September 18th,
and are part of Moody's on-going review process.

The ratings on the notes were monitored by evaluating factors
determined to be applicable to the credit profile of the notes,
such as i) the nature, sufficiency, and quality of historical
performance information regarding the asset class ii) an analysis
of the collateral being securitized, iii) an analysis of the
transaction's allocation of collateral cashflow and capital
structure, and (iv) a comparison of these attributes against those
of other similar transactions.

Moody's calculates estimated losses for Jumbo RMBS in a two-stage
process.  First, serious delinquencies are projected through late
2009, primarily based upon recent historical performance.  These
projected delinquencies are converted into projected losses using
lifetime roll rates (the probability of transition to default)
averaging 40% for 60-day delinquencies, 75% for delinquencies
greater than 90 days, and 90-100% for foreclosure or REO, and
severity assumptions averaging 35%.

The second step is to determine losses for the remaining life of
the deal, following the projection period.  Depending on a deal's
performance, including delinquency, default, and prepayment rates,
as well as collateral characteristics, such as loan type (fixed or
adjustable), or loan-to-value ratios and geographic concentrations
of remaining current loans, Moody's assumes varying degrees of
slowing in the loss rate (which is measured by loss-to-
liquidation) for the remaining life of the deal.  Typical degrees
of slowing in loss rate after late 2009 range from no slowing at
all to 40% slowing.  To take an example, a deal with very poor
early performance due to relatively high loan-to-value ratios and
dropping regional home values would be expected to see markedly
high delinquency and loss rates for the next year.  But the high
rate of losses may be expected to slow afterwards, as economic
factors and real estate values begin to stabilize, and a slowing
of 20-40% may be used in the projection.  On the other hand, a
deal with stronger early performance that is demonstrating
relative resiliency in the current market environment may not be
expected to have high losses in the near-term, but may be expected
to sustain a similar level of losses for the life of the deal, as
the pool continues to be subject to factors that have more
historically driven prime performance such as borrower life
events, unemployment, and so on.

Loss estimates are subject to variability and, as a result,
realized losses could ultimately turn out higher or lower than
Moody's current expectations.  Moody's will continue to evaluate
performance data as it becomes available and will assess the
pattern of potential future defaults and adjust loss expectations
accordingly if necessary.

The credit-linked notes in the RESIX shelf replicate the cash flow
of synthetic RMBS securities issued:

  -- RESIX Finance Limited Credit Linked Notes, Series 2004-A
     replicates  the cash flows of Class B7, Class B8, Class B9
     and Class B10 issued by the Real Estate Synthetic Investment
     Securities, Series 2004-A transaction.

  -- RESIX Finance Limited Credit Linked Notes, Series 2005-A
     replicates  the cash flows of Class B7 and Class B8 issued by
     the Real Estate Synthetic Investment Securities, Series 2005-
     A transaction.

  -- RESIX Finance Limited Credit-Linked Notes, Series 2005-D
     replicates  the cash flows of Class B7, Class B8, Class B9
     and Class B10 issued by the Real Estate Synthetic Investment
     Securities, Series 2005-D transaction.

  -- RESIX Finance Limited Credit-Linked Notes, Series 2006-A
     replicates  the cash flow of Class B7 issued by the Real
     Estate Synthetic Investment Securities, Series 2006-A
     transaction

  -- RESIX Finance Limited Credit- Linked Notes, Series 2006-C
     replicates  the cash flows of Class B7, Class B8 and Class B9
     issued by the RESI Finance Limited Partnership 2006-C
     transaction.

Complete rating actions are:

Issuer: RESI Finance Limited Partnership 2004-A RESI Finance
Limited Partnership 2004-A/RESI Finance DE Corporation 2004-A

  -- Cl. B10 Notes, Downgraded to B2, previously on 11/14/2007
     Upgraded to Ba3

Issuer: RESIX Finance Limited Credit-Linked Notes, Series 2004-A

  -- Cl. B10 Notes, Downgraded to B2, previously on 11/20/2008
     Upgraded to Ba3

Issuer: RESI Finance Limited Partnership 2005-A

  -- Cl. B8 Certificate, Downgraded to B1, previously on
     11/20/2008 Ba3 Placed under Review for Possible Downgrade

Issuer: RESIX Finance Limited Credit-Linked Notes, Series 2005-A

  -- Cl. B8 Notes, Downgraded to B1, previously on 11/20/2008 Ba3
     Placed under Review for Possible Downgrade

Issuer: Real Estate Synthetic Investment Securities, Series 2005-B

  -- Cl. B5 Certificate, Downgraded to Baa3, previously on
     6/29/2005 Assigned to Baa2

  -- Cl. B6 Certificate, Downgraded to Ba2, previously on
     6/29/2005 Assigned to Baa3

Issuer: RESI Finance Limited Partnership 2005-C

  -- Cl. B1 Certificate, Downgraded to Aa3, previously on
     4/11/2006 Assigned to Aa2

  -- Cl. B2 Certificate, Downgraded to A1, previously on

     11/20/2008 Aa3 Placed under Review for Possible Downgrade

  -- Cl. B3 Certificate, Downgraded to Baa2, previously on
     11/20/2008 A2 Placed under Review for Possible Downgrade

  -- Cl. B4 Certificate, Downgraded to Ba1, previously on
     11/20/2008 A3 Placed under Review for Possible Downgrade

  -- Cl. B5 Certificate, Downgraded to B3, previously on
     11/20/2008 Baa2 Placed under Review for Possible Downgrade

  -- Cl. B6 Certificate, Downgraded to C, previously on 11/20/2008
     Baa3 Placed under Review for Possible Downgrade

Issuer: RESI Finance Limited Partnership 2005-D, Real Estate
Synthetic Investment Securities, Series 2005-D

  -- Cl. B1 Certificate, Downgraded to Baa1, previously on
     11/20/2008 Aa2 Placed under Review for Possible Downgrade

  -- Cl. B2 Certificate, Downgraded to Baa2, previously on
     11/20/2008 Aa3 Placed under Review for Possible Downgrade

  -- Cl. B3 Certificate, Downgraded to B1, previously on
     11/20/2008 A2 Placed under Review for Possible Downgrade

  -- Cl. B4 Certificate, Downgraded to Caa2, previously on
     11/20/2008 A3 Placed under Review for Possible Downgrade

  -- Cl. B5 Certificate, Downgraded to Caa3, previously on
     11/20/2008 Baa2 Placed under Review for Possible Downgrade

  -- Cl. B6 Certificate, Downgraded to Ca, previously on
     11/20/2008 Baa3 Placed under Review for Possible Downgrade

  -- Cl. B7 Certificate, Downgraded to Ca, previously on
     11/20/2008 Ba2 Placed under Review for Possible Downgrade

  -- Cl. B8 Certificate, Downgraded to Ca, previously on
     11/20/2008 B1 Placed under Review for Possible Downgrade

  -- Cl. B9 Certificate, Downgraded to Ca, previously on 9/22/2008
     Downgraded to B3 and Placed under Review for Possible
     Downgrade

  -- Cl. B10 Certificate, Downgraded to C, previously on
     11/20/2008 Caa2 Placed under Review for Possible Downgrade

Issuer: RESIX Finance Limited Credit Linked Notes, Series 2005-D

  -- Cl. B7 Notes, Downgraded to Ca, previously on 11/20/2008 Ba2
     Placed under Review for Possible Downgrade

  -- Cl. B8 Notes, Downgraded to Ca, previously on 11/20/2008 B1
     Placed under Review for Possible Downgrade

  -- Cl. B9 Notes, Downgraded to Ca, previously on 9/22/2008
     Downgraded to B3 and Placed under Review for Possible
     Downgrade

  -- Cl. B10 Notes, Downgraded to C, previously on 11/20/2008 Caa2
     Placed under Review for Possible Downgrade

Issuer: RESI Finance Limited Partnership 2006-A

  -- Cl. B1 Certificate, Downgraded to A1 Certificate, previously
     on 11/20/2008 Aa2 Placed under Review for Possible Downgrade

  -- Cl. B2 Certificate, Downgraded to A2, previously on
     11/20/2008 Aa3 Placed under Review for Possible Downgrade

  -- Cl. B3 Certificate, Downgraded to Ba1, previously on
     11/20/2008 A2 Placed under Review for Possible Downgrade

  -- Cl. B4 Certificate, Downgraded to Ba3, previously on
     11/20/2008 A3 Placed under Review for Possible Downgrade

  -- Cl. B5 Certificate, Downgraded to Caa1, previously on
     11/20/2008 Baa2 Placed under Review for Possible Downgrade

  -- Cl. B6 Certificate, Downgraded to Caa3, previously on
     11/20/2008 Baa3 Placed under Review for Possible Downgrade

  -- Cl. B7 Certificate, Downgraded to Ca, previously on
     11/20/2008 B1 Placed under Review for Possible Downgrade

Issuer: RESIX Finance Limited Credit Linked Notes, Series 2006-A

  -- Cl. B7 Notes, Downgraded to Ca, previously on 11/20/2008 B1
     Placed under Review for Possible Downgrade

Issuer: RESI Finance Limited Partnership 2006-B

  -- Cl. B1 Certificate, Downgraded to A1, previously on
     11/20/2008 Aa2 Placed under Review for Possible Downgrade

  -- Cl. B2 Certificate, Downgraded to A3, previously on
     11/20/2008 Aa3 Placed under Review for Possible Downgrade

  -- Cl. B3 Certificate, Downgraded to Ba1, previously on
     11/20/2008 A2 Placed under Review for Possible Downgrade

  -- Cl. B4 Certificate, Downgraded to Ba2, previously on
     11/20/2008 A3 Placed under Review for Possible Downgrade

  -- Cl. B5 Certificate, Downgraded to B3, previously on
     11/20/2008 Baa1 Placed under Review for Possible Downgrade

  -- Cl. B6 Certificate, Downgraded to Caa2, previously on
     11/20/2008 Baa3 Placed under Review for Possible Downgrade

Issuer: RESI Finance Limited Partnership 2006-C

  -- Cl. B1 Notes, Downgraded to A3, previously on 11/20/2008 Aa2
     Placed under Review for Possible Downgrade

  -- Cl. B2 Notes, Downgraded to Baa2, previously on 11/20/2008
     Aa3 Placed under Review for Possible Downgrade

  -- Cl. B3 Notes, Downgraded to B3, previously on 11/20/2008 A1
     Placed under Review for Possible Downgrade

  -- Cl. B4 Notes, Downgraded to Caa1, previously on 11/20/2008 A2
     Placed under Review for Possible Downgrade

  -- Cl. B5 Notes, Downgraded to Caa3, previously on 11/20/2008
     Ba1 Placed under Review for Possible Downgrade

  -- Cl. B6 Notes, Downgraded to Ca, previously on 11/20/2008 Ba3
     Placed under Review for Possible Downgrade

  -- Cl. B7 Notes, Downgraded to Ca, previously on 11/20/2008 B2
     Placed under Review for Possible Downgrade

  -- Cl. B8 Notes, Downgraded to Ca, previously on 9/22/2008
     Downgraded to B3 and Placed under Review for Possible
     Downgrade

  -- Cl. B9 Notes, Downgraded to C, previously on 11/20/2008 Caa2
     Placed under Review for Possible Downgrade

Issuer: RESIX Finance Limited Credit-Linked Notes, Series 2006-C

  -- Cl. B7 Certificate, Downgraded to Ca, previously on
     11/20/2008 B2 Placed under Review for Possible Downgrade

  -- Cl. B8 Certificate, Downgraded to Ca, previously on 9/22/2008
     Downgraded to B3 and Placed under Review for Possible
     Downgrade

  -- Cl. B9 Certificate, Downgraded to C, previously on 11/20/2008
     Caa2 Placed under Review for Possible Downgrade

Issuer: RESI Finance Limited Partnership 2007-A

  -- Cl. B3 Notes, Downgraded to Caa3, previously on 11/20/2008 B1
     Placed under Review for Possible Downgrade

  -- Cl. B4 Notes, Downgraded to Ca, previously on 9/22/2008
     Downgraded to B2 and Placed under Review for Possible
     Downgrade

  -- Cl. B5 Notes, Downgraded to Ca, previously on 9/22/2008
     Downgraded to B3 and Placed under Review for Possible
     Downgrade

  -- Cl. B6 Notes, Downgraded to Ca, previously on 9/22/2008
     Downgraded to B3 and Placed under Review for Possible \
     Downgrade

  -- Cl. B7 Notes, Downgraded to Ca, previously on 11/20/2008 Caa2
     Placed under Review for Possible Downgrade

  -- Cl. B8 Notes, Downgraded to C, previously on 9/22/2008
     Downgraded to Ca

Issuer: RESI Finance Limited Partnership 2007-B

  -- Cl. B3 Notes, Downgraded to Caa1, previously on 11/20/2008
     Baa2 Placed under Review for Possible Downgrade

  -- Cl. B4 Notes, Downgraded to Caa3, previously on 11/20/2008
     Ba1 Placed under Review for Possible Downgrade

  -- Cl. B5 Notes, Downgraded to Ca, previously on 11/20/2008 Ba2
     Placed under Review for Possible Downgrade

  -- Cl. B6 Notes, Downgraded to Ca, previously on 11/20/2008 Ba3
     Placed under Review for Possible Downgrade

  -- Cl. B7 Notes, Downgraded to C, previously on 9/22/2008
     Downgraded to B3 and Placed under Review for Possible
     Downgrade

Issuer: RESI Finance Limited Partnership 2007-C

  -- Cl. B6 Notes, Downgraded to Caa3, previously on 11/20/2008 B1
     Placed under Review for Possible Downgrade

Issuer: EASI Finance Limited Partnership 2007-1

  -- Cl. B-3 Certificate, Downgraded to Ca, previously on
     9/22/2008 Downgraded to B1 and Placed under Review for
     Possible Downgrade

  -- Cl. B-4 Certificate, Downgraded to Ca, previously on
     9/22/2008 Downgraded to B2 and Placed under Review for
     Possible Downgrade

  -- Cl. B-5 Certificate, Downgraded to Ca, previously on
     9/22/2008 Downgraded to B3 and Placed under Review for
     Possible Downgrade

  -- Cl. B-6 Certificate, Downgraded to Ca, previously on
     9/22/2008 Downgraded to Caa2

  -- Cl. B-7 Certificate, Downgraded to C, previously on 9/22/2008
     Downgraded to Ca

  -- Cl. B-8 Certificate, Downgraded to C, previously on 9/22/2008
     Downgraded to Ca

  -- Cl. B-9 Certificate, Downgraded to C, previously on 9/22/2008
     Downgraded to Ca


RYLAND GROUP: Fitch Downgrades Issuer Default Rating to 'BB'
------------------------------------------------------------
Fitch Ratings has downgraded Ryland Group, Inc.'s Issuer Default
Rating and outstanding debt ratings:

  -- IDR to 'BB' from 'BB+';
  -- Senior unsecured to 'BB' from 'BB+';
  -- Unsecured bank credit facility to 'BB' from 'BB+'.

The Rating Outlook remains Negative.

The downgrade reflects the current very difficult housing
environment and Fitch expectations that housing activity will be
even more challenging than previously anticipated throughout
calendar 2009.  The recessionary economy and impaired mortgage
markets are, of course, contributing to the housing shortfall.
The ratings changes also reflect negative trends in RYL's
operating margins, further deterioration in credit metrics
(especially interest coverage and debt/EBITDA ratios) and erosion
in tangible net worth from non-cash real estate charges.  However,
RYL's liquidity position provides a buffer and supports the new
ratings.  Fitch notes there is potential for lower cash flow from
operations next year relative to fiscal 2008.

Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as land
and development spending, general inventory levels, speculative
inventory activity (including the impact of high cancellation
rates on such activity), gross and net new order activity, debt
levels and free cash flow trends and uses.

The ratings reflect RYL's successful execution of its business
model, moderate financial policies and geographic and product line
diversity.  In recent years RYL has improved its capital
structure, pursued conservative capitalization policies and has
positioned itself to withstand a meaningful housing downturn.

RYL's significant ranking (within the top five or top ten) in most
of its markets, its presale operating strategy and a return on
capital focus provide the framework to soften the impact on
margins from declining market conditions.  Acquisitions have not
played a part in RYL's operating strategy, as management has
preferred to focus on internal growth (expanding its position in
existing markets and occasional greenfield new market entries).

RYL's inventory turns remain strong in comparison to the industry,
demonstrating the company's ability to generate liquidity from
its inventory base.  Inventory/net debt stood at 3.2 times at
Sept. 30, 2008, above levels of the mid-to-late 1990s (although
below the average 5.1x of the 2001-2005 period), providing some
buffer against a further downturn in housing and/or in economic
conditions.  RYL maintains a 3.7-year supply of lots (based on
last 12 months deliveries), 74.3% of which are owned and the
balance controlled through options.  (The options share of total
lots controlled is down sharply over the past two years as the
company has written off substantial numbers of options.)

As the housing cycle continues to contract, creditors should
benefit from RYL's financial flexibility supported by cash and
equivalents of $344.8 million and $382 million available under its
$550 million unsecured credit facility as of Sept. 30, 2008.  In
June 2008, RYL amended its credit facility to, among other things,
reduce the aggregate commitment from $750 million to $550 million
and modify the tangible net worth and leverage covenants.  The
credit facility matures in January 2011.


SALLY HOLDINGS: S&P Raises Corporate Credit Rating to B+ From B
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
issue-level ratings on Denton, Texas-based Sally Holdings LLC by
one notch.  The corporate credit rating was raised to 'B+' from
'B.'  The rating outlook is stable.

"The ratings upgrade is based on Sally's consistent improvement in
operating performance over the past year, including a 5% year-
over-year increase in revenues, and margins that widened to 17.2%
for the year ended Sept. 30, 2008, from 16.2% the prior year,"
said S&P's credit analyst Jackie Oberoi.  "Credit protection
measures improved as well, with leverage of 5.9x at year-end and
EBITDA interest coverage of 2x."

The 'B+' rating reflects Sally's highly leveraged capital
structure after its 2007 buyout transaction, thin cash flow
protection measures, and participation in the competitive
professional beauty supply industry.

Sally, with about $2.6 billion in sales in 2008, is the largest
distributor of professional beauty supplies in the U.S.  The
company was spun off from Alberto-Culver Co. in November 2006 in a
buyout transaction.  At Sept. 30, 2008, Sally operated about 3,600
retail stores, and had 169 franchised stores and more than 1,000
professional distributor sales consultants under two segments:
Sally Beauty Supply, a domestic and international chain of cash-
and-carry stores offering professional beauty supplies to both
salon professionals and retail customers; and BSG, a full-service
beauty supply distributor offering professional brands directly to
salons through its own sales force and professional-only stores.
The market is very fragmented, and competitors include a wide
array of retail outlets, such as mass merchandisers, drugstores,
and supermarkets, as well as local and regional operators.

Trailing-12-month operating margins have consistently improved
over the past several quarters and were at 17.2% at fiscal year-
end Sept. 30, 2008.  Improvements were driven by Sally Beauty
Supply's sales leverage and increased sales of higher-margin
exclusive label products, offset by higher freight and marketing
expenses and continued acquisition integration costs.

Credit measures deteriorated substantially following the company's
buyout transaction, with leverage of nearly 7x.  Leverage improved
to less than 6x, and interest coverage was at 2x for the year
ended Sept. 30, 2008.  Lease-adjusted debt levels exceed
$2 billion.


SEAGATE TECH: S&P Cuts Senior Unsecured Rating to 'BB-'
-------------------------------------------------------
Standard & Poor's Ratings Services lowered the senior unsecured
ratings on Seagate Technology HDD Holdings to 'BB-' from 'BB+' and
revised the recovery rating on those issues to '3', indicating
meaningful recovery (50%-70%) in the event of a payment default,
from '4'.  At the same time, S&P lowered the senior unsecured
rating on Maxtor Corp. to 'B' from 'BB+' and revised the recovery
rating to '6', indicating negligible recovery (0-10%) in the event
of a payment default, from '4'.

The action follows the company's announcement that it expects
revenues to decline sequentially in a 14%-24% range in the
December quarter and that operating results will be lower than
previously expected.  "The drop in earnings will pressure the
company's net debt-to-EBITDA measure, which is used in a
performance covenant in the company's $500 million revolving
credit facility," explained S&P's credit analyst Lucy Patricola.
The covenant calls for a minimum net debt to EBITDA of 1.5x, and
while the company currently is comfortably in compliance -- S&P's
estimates the ratio at about 0.4x -- the expected weakness in
December earnings likely will significantly diminish headroom.
"If operating results for the following quarters remain weak,"
added Ms. Patricola, "meeting the covenant could be a challenge."


SECURUS TECHNOLOGIES: S&P Affirms 'B-' Issue-Level Rating
---------------------------------------------------------
Standard & Poor's Ratings Services said it revised the outlook on
Dallas-based inmate telecommunications provider Securus
Technologies Inc. to stable from negative.  At the same time, S&P
affirmed the company's 'B-' corporate credit rating and the 'B-'
issue-level and '4' recovery rating on its second-lien notes.
Total funded debt at Sept. 30, 2008, was $274 million.

"The revision in outlook to stable reflects our view that the
company is likely to generate sufficient EBITDA on an ongoing
basis to meet its minimum financial maintenance interest covenant
of 1.75x on its second-lien notes," said S&P's credit analyst
Catherine Cosentino.  Since early 2008, Securus' EBITDA levels
have grown sufficiently to provide adequate cushion on an ongoing
basis.  "Furthermore," added Ms. Cosentino, "it refinanced its
revolving credit facility with a new facility which provides
additional liquidity."

The 'B-' rating reflects the company's highly leveraged financial
risk profile and a narrow focus within a competitive and evolving
niche marketplace.  A largely recurring revenue base, supported by
long-term customer contracts, fails to mitigate these risks.

Securus is one of the two leading independent providers of inmate
telecommunications services to corrections facilities operated by
city, county, state, and federal authorities in the U.S. and
Canada.  It has been competing aggressively with several other
independent providers in this narrow, approximately $1.4 billion
market, for business traditionally held by the regional Bell
operating companies, local exchange carriers, and inter-exchange
carriers, most of whom have exited the corrections services
market in the past few years.


SIMMONS BEDDING: Lenders Extend Forbearance Period to March 2009
----------------------------------------------------------------
Simmons Bedding Company, a subsidiary of Simmons company, and its
senior lenders have agreed to extend the company's forbearance
period through the end of March 2009, subject to the terms of the
parties' agreement.

The forbearance period extension is designed to provide Simmons
with sufficient time to reduce the debt on its balance sheet
through an organized financial restructuring.  In agreeing to
extend the forbearance period, Simmons' lenders have demonstrated
their confidence in the company's ability to implement the
financial restructuring in a way that maximizes value for all of
its constituencies, including lenders, customers and suppliers.

Simmons President and Chief Operating Officer Steve Fendrich
stresses that the company's restructuring will not affect
retailers' day to day business relationship with the company.  "We
expect that the restructuring will be invisible to our retailers
and suppliers and it will not have any impact on the way we bring
products to market, service our retailers or manufacture goods.
It's our intention that Simmons will be a stronger and more
financially sound company as a result."

Mr. Fendrich continued, "This past year has been difficult for the
entire bedding industry.  However, the steps that we're taking now
will allow Simmons to remain an industry leader. Our marketing and
product development fundamentals are extremely sound; they've
carried us through 11 consecutive quarters of growth that have
outpaced the industry and helped Simmons to gain market share."

Simmons will continue its tradition of innovation with the launch
of several new products and retail marketing concepts at the Las
Vegas Furniture Market in February.

Simmons has said it plans to work with its various stakeholders to
design and implement the restructuring in a manner that maximizes
value and preserves and protects its relationships with customers
and suppliers.

On December 10, 2008, Simmons company's subsidiaries, Simmons
Bedding company, THL-SC Bedding company and certain subsidiaries
of Simmons Bedding party to its senior credit facility, entered
into the Second Forbearance Agreement; Third Amendment to the
Second Amended and Restated Credit and Guaranty Agreement and
First Amendment to the Pledge and Security Agreement with its
senior lenders and Deutsche Bank AG, as a senior lender and
administrative agent for the senior lenders.

As of December 9, 2008, the aggregate principal balances of the
company's loans and aggregate face amount of its letters of credit
were:

     Tranche D Term Loans                   $465,000,000
     Revolving Loans                         $64,532,384
     Letters of Credit                       $10,427,327

The company and each Credit Party agree that as of December 9, the
aggregate amount of accrued and unpaid interest on the Tranche D
Term Loans and Revolving Loans is $3,931,276, and the accrued and
unpaid commitment fees payable pursuant to the Credit Agreement is
$65.87 and the accrued and unpaid letter of credit fees payable is
$42,540.  The amounts do not include other fees, expenses and
other amounts which are chargeable or otherwise reimbursable under
the Credit Agreement and the other Credit Documents.  None of the
company and the other Credit Parties have any rights of offset,
defenses, claims or counterclaims with respect to any of the
Obligations and each of the Credit Parties are jointly and
severally obligated with respect thereto, in accordance with the
terms of the Credit Documents.

Pursuant to the Second Forbearance Agreement, Simmons covenants
with the lenders not to permit:

   (i) the sum of the Cash and Cash Equivalents of the company
       and all of its Domestic Subsidiaries at the close of
       business on any Business Day to be less than $2.5 million
       on any two consecutive Business Days; or

  (ii) the average Daily Cash Balance for any five consecutive
       Business Days to be less than $7.5 million.

The company will deliver to the Agent commencing with the week of
December 15, 2008, a report of the Daily Cash Balances as a
consolidated number for each Business Day of the preceding week,
certified by the company's chief financial officer or other
financial officer of the company that is a Responsible Officer.

The company is also required to deliver a long-term business plan
approved by the company's Board of Directors to the Agent by no
later than January 7, 2009, which will include (i) forecasted
consolidated balance sheets -- assuming a static capitalization --
and forecasted consolidated statements of income and cash flows of
the company and its Subsidiaries for the next succeeding 3 Fiscal
Years, together with an explanation of the material assumptions on
which such forecasts are based and (ii) forecasted consolidated
statements of income and cash flows of the company and its
Subsidiaries for each month of the Fiscal Year ending in 2009,
together with an explanation of the material assumptions on which
such forecasts are based.

The company was to commence on January 9, 2009, distribution of
marketing materials to solicit potential debt or equity
investments.  On or before January 26, 2009, the company is
required deliver a potential restructuring proposal approved by
the company's Board of Directors to the Agent.

A full-text copy of the Second Forbearance Agreement is available
at no charge at:

              http://ResearchArchives.com/t/s?3642

Headquartered in Atlanta, Georgia, Simmons company --
http://www.simmons.com/-- is a mattress manufacturer and marketer
of a range of products through its indirect subsidiary Simmons
Bedding company.  Products includes Beautyrest(R), Beautyrest
Black(TM), ComforPedic by Simmons(TM), Natural Care(TM),
BackCare(R), Beautyrest Beginnings(TM) and Deep Sleep(R).  Simmons
Bedding company operates 21 conventional bedding manufacturing
facilities and two juvenile bedding manufacturing facilities
across the United States, Canada and Puerto Rico.  Simmons also
serves as a key supplier of bedding to hotel groups and resort
properties.


SLANE 840: Auction Sale of Pledged Collateral Set for Jan. 7
------------------------------------------------------------
CPI Pool II Funding, LLC, a Delaware limited liability company,
will sell at a public auction on Jan. 7, 2009, the property
securing the obligations owed to it by Slane 840 Weschester Ave.,
LLC.  The auction will be held in Room 130 of the New York County
Courthouse, 60 Centre Street, in New York.

The property consists of 100% of all rights, title and interest
which The Slane Company, Ltd., an Ohio limited liability company,
and Westchester Investment LLC, an Ohio limited liability, have in
the Borrower; and 100% of all rights, title and interest which the
Borrower has in Slane properties, LLC, a New York limited
liability company.

For a more detailed description of the Pledged Collateral and for
certain information concerning the Pledgors and the Property,
please contact:

          Barry G. Margolis, Esq.
          Email: bmargolis@agmblaw.com
          Abrams Garfinkel Margolis Bergson, LLP
          237 West 35th Street, Fourth Floor,
          New York City
          Tel: (212) 201-1174

Slane 840 Westchester Ave., LLC, a New York limited liability
company, is the sole member of Slane Properties, LLC, a New York
limited liability company which is the ground lessee of land known
as Block 2689, Lots, 1, 47 and 48 located at 854 Westchester
Avenue, the Bronx, in New York.


SPECIAL DEVICES: Fails to Refinance Debt, Files for Chapter 11
--------------------------------------------------------------
Dawn McCarty and Bob Van Voris at Bloomberg News reports that
Special Devices Inc. has filed for Chapter 11 protection in the
U.S. Bankruptcy Court for the District of Delaware, after failing
to refinance $73.6 million in debt.

According to court documents, Special Device's Chief Financial
Officer Harry Rector III said, "During 2008, SDI explored a number
of refinancing options with respect to the senior subordinated
notes.  However by late November 2008 it became clear that any
such refinancing could not be implemented."

Court documents say that Special Devices listed debts of
$103.6 million and assets of $53.1 million on a consolidated basis
as of July 27, 2008.  Bloomberg relates that Special Devices owes
about $13.2 million under a pre-bankruptcy loan agreement.

Bloomberg reports that Special Devices will borrow $22.5 million
from Wayzata Investment Partners LLC, as agent, and will use the
money to fund its Chapter 11 reorganization.  Court documents say
that Special Devices is also asking for the Court's permission to
borrow as much as $3 million on an interim basis.

Special Devices has secured over $20 million of debtor-in-
possession financing, from its largest creditor, Wayzata
Investment Partners LLC.  "This financing supplements the
company's cash availability and provides the liquidity and funding
necessary to carry out this balance sheet restructuring.  We are
pleased to have the support of our largest creditor in this
process," Special Devices President and CEO Christopher Hunter.
The company would submit the agreements to the Court for approval
as part of its First Day Motions.

Special Devices sought Court approval for various, customary
First-Day Motions, including:

     -- maintaining employee payroll and health benefits;

     -- the fulfillment of certain pre-filing obligations;

     -- the continuation of the company's cash management system;
        and

     -- the ability to honor all customer programs.

Special Devices anticipates its First-Day Motions to be approved
in the next few days.

Special Devices will continue to operate all of its three business
units during the restructuring.  The company said that it has
sufficient cash to do so.

Mr. Hunter said, "Factors beyond our control have resulted in a
financial tsunami -- a significant decline in automotive related
revenue and a tough global economy coupled with a credit crisis
that makes it extremely difficult to support our debt structure.
We believe that this restructuring will bring the level of our
debt in line with current economic realities, and will allow the
business to continue to provide world-class pyrotechnic products
and related services to our customers around the world.  This
restructuring effort is focused on our capital structure, not our
operations."

Moorpark, California-based Special Devices Inc. --
http://www.specialdevices.com/-- was founded in the 1950s to
manufacture explosives for film special effects, also makes
initiators for the defense and mining industries.  The company
makes a component that causes car air-bags to deploy.


SPANSION INC: Fitch Sees Likely Default, Junks Ratings on $1B Debt
------------------------------------------------------------------
Fitch Ratings has downgraded these ratings for Spansion Inc.:

  -- Issuer Default Rating) to 'CCC' from 'B-';

  -- $175 million senior secured revolving credit facility (RCF)
     due 2010 to 'CCC+/RR3' from 'B/RR3';

  -- $625 million senior secured floating rating notes due 2013 to
     'CCC+/RR3' from 'B/RR3';

  -- $225 million of 11.25% senior unsecured notes due 2016 to
     'CC/RR6' from 'CCC/RR6';

  -- $207 million of 2.25% convertible senior subordinated
     debentures due 2016 to 'CC/RR6' from 'CCC-/RR6'.

The Rating Outlook is Negative.  Approximately $1.3 billion of
debt securities are affected by Fitch's actions.

The downgrade and Negative Rating Outlook reflect Fitch's belief
that there is a real possibility Spansion will default over the
near-term, due to a combination of a challenging macroeconomic
environment and the company's weak liquidity position.  Fitch
believes Spansion's survival over the next 12 months will depend
upon a combination of better than expected demand and pricing
environment, ability to renew the RCF in Japan, obtain a line of
credit related to the ARS settlement, and asset sales.

Fitch expects double digit revenue decline for Spansion in 2009,
driven by ongoing pricing pressures that will be exacerbated by
meaningfully lower consumer spending on electronics over the near-
term.  In particular, Fitch expects mobile phone units and
automotive electronics, end markets representing well over half of
Spansion's unit shipments, to decline meaningfully in 2009.  The
resultant significantly lower gross profits will drive negative
free cash flow in 2009, despite the company's aggressive cost
cuts, including slashing discretionary capital spending.

This anticipated cash usage will erode Spansion's already weak
liquidity, which as of Sept. 28, 2008 was supported by
approximately $152 million of cash and cash equivalents and
approximately $100 million of availability under various credit
facilities.  The company also has approximately $125 million of
debt amortization and approximately $60 million due under capital
leases through the end of 2009.  Furthermore, as of Sept. 28,
2008, approximately $75 million was outstanding under the
company's Spansion Japan revolving credit facility, expiring in
December 2009.  This facility comprises approximately $50 million
of the aforementioned $100 million of the company's available
credit, and the terms and conditions of the related credit
agreement provide for annual renewal.  In addition, Spansion has
approximately $38.4 million available under the U.S. RCF.
However, Fitch expects availability will be reduced by the
facility's borrowing base roughly commensurate with anticipated
sales declines.

Cash balances exclude approximately $107 million of auction rate
securities classified as marketable securities that Fitch
considers illiquid at present.  However, the ARS portfolio could
provide additional liquidity, as the company has the opportunity
to participate in a settlement with UBS providing for the
repurchase of these securities beginning in June 2010.  Spansion
is in discussions with lenders regarding a line of credit against
the anticipated settlement of up to 75% of market value of the ARS
portfolio.

Fitch believes further negative rating actions could be driven by:
faster than anticipated erosion of cash balances, driven by weaker
than expected operating results; or the company's inability to
bolster liquidity via refinancing the RCF in Japan, securing the
ARS-related line of credit, or selling assets.

The ratings could be stabilized if: operating results meaningfully
outperform Fitch's current expectations, resulting in at worst
modest cumulative cash burn through at least the end of 2009; and
the company successfully renews its RCF in Japan, obtains the ARS-
related funding, and receives meaningful proceeds from asset
sales.

Total debt as of Sept. 30, 2008 was approximately $1.6 billion and
consisted primarily of: i) approximately $272 million outstanding
under Spansion Japan's, a wholly-owned subsidiary of Spansion
Inc., senior secured credit facility expiring Dec. 16, 2010; ii)
approximately $55 million outstanding under Spansion Inc.'s
$175 million senior secured RCF expiring Sept. 19, 2010, the
availability of which has been reduced by a combination of a lower
borrowing base and $35 million due to EBITDA levels falling below
prescribed minimum levels; iii) approximately $75 million
outstanding under Spansion Japan's senior secured RCF expiring
Dec. 28, 2009; iv) approximately $625 million of floating rate
senior secured notes due 2013; v) approximately $225 million of
11.25% senior unsecured notes due 2016; vi) $207 million of 2.25%
exchangeable senior subordinated debentures due 2016; and vii)
approximately $80 million of other debt, including capital leases.

The Recovery Ratings and notching reflect Fitch's expectation that
Spansion's enterprise value, and hence recovery rates for its
creditors, will be maximized as a going concern rather than as in
liquidation under a distressed scenario, although the difference
between the two continues to shrink.  Fitch's analysis assumes
Spansion ability to draw against its bank credit facilities will
remain constrained by covenants, reducing availability under its
U.S. RCF by $35 million due to EBITDA falling below prescribed
levels, as well as the current borrowing base.  Fitch has reduced
the discount to operating EBITDA (in estimating distressed
operating EBITDA)to 0% from 25% due to Fitch's expectations that
Spansion's profitability will decline meaningfully in the fourth
quarter, resulting in an already distressed operating EBITDA
amount of approximately $210 million for the full fiscal year of
2008.

Fitch believes $800 million of rated senior secured debt,
including $625 million of senior secured floating rate notes and a
fully drawn $175 million U.S. revolving bank credit facility, will
recover 51%-70% in a reorganization scenario, resulting in a 'RR3'
recovery rating.  A waterfall analysis provides 0% recovery for
the approximately $225 million of rated senior unsecured debt and
$207 million of senior subordinated notes, both resulting in a
recovery rating of 'RR6'.


SPECIAL DEVICES: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Special Devices, Incorporated
        14370 White Sage Road
        Moorpark, CA 93021

Bankruptcy Case No.: 08-13312

Related Information: The Debtor designs and makes energetic
                     devices.  The Debtor's business is comprised
                     of three segments: (i) automotive business
                     unit; (ii) defense and aerospace business
                     unit; and mining and blasting unit.

                     See: http://www.specialdevices.com/

Chapter 11 Petition Date: December 15, 2008

Court: District of Delaware (Delaware)

Judge: Mary F. Walrath

Debtor's Counsel: Jason M. Madron, Esq.
                  madron@rlf.com
                  Mark D. Collins, Esq.
                  collins@RLF.com
                  Richards, Layton & Finger, P.A.
                  One Rodney Square
                  P.O. Box 551
                  Wilmington, DE 19899
                  Tel: (302) 651-7595
                  Fax: (302) 651-7701

Special Corporate Counsel: Gibson, Dunn & Crutcher LLP

Claims Agent: Kurztman Carson Consultants LLC

Estimated Assets: $50 million to $100 million

Estimated Debts: $50 million to $100 million

The petition was signed by chief financial officer Harry
Rector.

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
United States Trust Company                      $77,779,658
of New York
114 West 47th Street
25th Floor
New York, NY 10036
Tel: (212) 852-1674

Schott Electronic Packaging                      $1,839,344
LA
Dvorkova 997, CR-56301
Lanskroun, Czech Republic
Tel: (303) 277-4525 AR

Hermetic Seal Corporation                        $1,807,862
4234 Temple City Blvd.
Rosemead, CA 91770
Tel: (626) 443-8931

Wiley Rein LLP                                   $1,622,320
1776 K. Street NW
Washington, DC 20006
Tel: (202) 719-7240

JF Lehman & Company Inc.                         $553,466
2001 Jefferson Davis Highway
Suite 607
Arlington, VA 22202
Tel: (703) 418-6099

Truelove & MacLean Inc.                          $325,281

Ventura County Tax                               $215,146

Machine Laboratory LLC                           $175,534

Braxton Manufacturing Co. Inc.                   $130,745

Law Offices of Fennemore                         $127,302
Craig

TAC Worldwide Companies                          $117,966

NetApp Financial Solutions                       $103,000

Genesis Plastics Tech, Inc.                      $96,110

Cesaroni Technology Inc.                         $92,148

Daicel Safety Systems LLC                        $85,536

Blank Rome LLP                                   $83,569

Chemetall Foote                                  $75,281

Brown & White LLP                                $73,853

Applimonton Inc.                                 $71,780

Marman Industries Inc.                           $71,500

GCA Services Group Inc.                          $70,953

Viering, Jentschura & Partner                    $70,784

DMC Manufacturing Corp.                          $69,807

Polyone Distribution                             $59,272

National Technical Services                      $57,470

Chemetall Foote Corp.                            $55,725

Precision Hermetic Technology                    $51,890

PricewaterhouseCoopers                           $50,000

Accratronics Seal Corp.                          $49,636

ProPak                                           $46,658

Seacor Piezo Ceramics                            $43,398


STANDARD PACIFIC: Fitch Affirms Issuer Default Rating at 'B-'
-------------------------------------------------------------
Fitch Ratings has affirmed Standard Pacific Corp.'s Issuer Default
Rating and outstanding debt ratings:

  -- IDR at 'B-';

  -- Secured borrowings under bank revolving credit facility at
     'BB-/RR1';

  -- Unsecured borrowings under bank revolving credit facility at
     'B-/RR4';

  -- Senior unsecured at 'B-/RR4';

  -- Senior subordinated debt at 'CCC/RR6'.

SPF's Outlook is Stable.

Fitch's 'RR1' Recovery Rating on the secured advances under SPF's
revolving credit facility indicates outstanding (90%-100%)
recovery prospects for holders of this debt issue.  The 'RR4' on
SPF's unsecured notes and the unsecured advances under its
revolving credit facility indicate average (30%-50%) recovery
prospects for holders of these debt issues.  Standard Pacific's
exposure to claims made pursuant to performance bonds and joint
venture debt and the possibility that a portion of these
contingent liabilities would have a claim against the company's
assets were considered in determining the recovery for the
unsecured debt holders.  The 'RR6' on SPF's senior subordinated
notes indicate poor recovery prospects (0%-10%) in a default
scenario.  Fitch applied a liquidation value analysis for these
RRs.

The ratings reflect the current difficult U.S. housing environment
(especially in SPF's key California and Florida markets) and
Fitch's expectation that housing activity will be even more
challenging than previously anticipated throughout calendar 2009.
The recessionary economy and impaired mortgage markets are, of
course, contributing to the housing shortfall.  The ratings also
reflect current and expected negative trends in SPF's operating
margins and meaningful deterioration in credit metrics
(particularly interest coverage, debt/EBITDA ratios and tangible
net worth).  There is potential for lower cash flow from
operations next year relative to fiscal 2008.

The Stable Outlook reflects the company's strengthened balance
sheet and improved liquidity position resulting from the recent
equity investment made by Matlin Patterson as well as the
completion of a previously announced rights offering.  Standard
Pacific ended the September quarter with $712 million of cash on
the balance sheet and approximately $200 million of availability
under its revolving credit facility.

SPF amended its bank credit facilities on June 27, 2008.  As part
of the amendment, the commitments under the revolving credit
facility were reduced from $500 million to $395 million and the
company paid down its revolver balance from $90 million to
$55 million and its Term Loan A balance from $100 million to
$65 million.  Additionally, certain financial covenants, including
leverage, interest coverage and tangible net worth requirements,
were eliminated.  The amended credit facilities contain a new
liquidity test requiring SPF to maintain either a minimum ratio of
cash flow from operations to interest incurred or a minimum
liquidity reserve.

SPF's improved liquidity position, including a less restrictive
covenant structure under its bank credit facilities, allows the
company to fund working capital needs and meet upcoming debt
maturities, including required quarterly amortizations, during the
remainder of 2008 and first half-2009.  SPF paid down $103 million
of notes that came due in October 2008 and has $125 million of
unsecured notes coming due in April, 2009.

SPF and its JV partners generally provide credit enhancements in
connection with JV borrowings in the form of loan-to-value
maintenance agreements.  At Sept. 30, 2008, approximately
$245 million of its unconsolidated JV borrowings were subject to
these credit enhancements.  SPF is solely responsible for $16.6
million and is jointly and severally responsible (with its
partners) for $228.4 million of debt.  While the company has
reduced its joint venture exposure, SPF's liquidity may be
negatively impacted by potential re-margining contributions as
well as cash outflow from unwinding certain JVs.

Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as land
and development spending, general inventory levels, speculative
inventory activity (including the impact of high cancellation
rates on such activity), gross and net new order activity, debt
levels and free cash flow trends and uses.


STANDARD STEEL: Moody's Affirms 'B2' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family and
probability of default ratings of Standard Steel, LLC.  The rating
outlook is stable.

The B2 affirmation balances a good level of 2008 free cash flow, a
substantial proportion of 2009 manufacturing capacity covered
under take-or-pay contracts, and the existence of robust raw
material pricing surcharge contract provisions, against high
leverage, small size, high customer concentration, and exposure to
a weakening new rail car build market.

The stable outlook reflects Moody's expectation of a sustained
adequate liquidity profile, debt reductions from prepayments and
via excess cash flow repayment provisions, the high proportion of
contracted 2009 sales, and the view that replacement wheel demand
should sustain revenues near term though new car build rates may
falter.  Nevertheless, due to the recession's potential impact on
the overall rail industry, the outlook will be sensitive to
underperformance and liquidity profile decline.  Since Standard
Steel's first lien credit facility has aggressive financial ratio
covenant test step-downs upcoming, ability to meet expected
production volumes, margins and cash flow generation will be
critical to maintaining the adequate liquidity profile.

In addition to the affirmed B2 corporate family and probability of
default ratings, these ratings were affirmed, with loss given
default assessment rates changing:

  -- 20 million first lien revolving credit facility due 2011: B2
     LGD 3, to 45% from 44%

  -- $100 million first lien term loan due 2012: B2 LGD 3, to 45%
     from 44%

  -- $20 million first lien delayed draw term loan due 2012: B2
     LGD 3, to 45% from 44%

  -- $25 million second lien term loan due 2013: Caa1 LGD 6,
     unchanged at 92%

Standard Steel's ratings were assigned by evaluating factors
Moody's believe are relevant to the credit profile of the issuer,
such as i) the business risk and competitive position of the
company versus others within its industry, ii) the capital
structure and financial risk of the company, iii) the projected
performance of the company over the near to intermediate term, and
iv) management's track record and tolerance for risk.  These
attributes were compared against other issuers both within and
outside of Standard Steel's core industry and Standard Steel's
ratings are believed to be comparable to those of other issuers of
similar credit risk.

Moody's last rating action on Standard Steel, LLC took place on
June 23, 2008 when the B2 corporate family rating was affirmed.
Standard Steel, LLC, based in Burnham, Pennsylvania, manufactures
forged wheels and axles used in freight and passenger rail cars
and locomotives.  The company had last twelve month September 2008
revenues of approximately $221 million.


SUPER SAVE: Voluntary Chapter 15 Case Summary
---------------------------------------------
Chapter 15 Petitioner: Barry Anthony Taylor

Chapter 15 Debtor: Super Save Superannuation Fund (In Liquidation)
                   HLB Mann Judd
                   level 19, 207 Kent Street
                   Sydney, New South Wales
                   Australia

Chapter 15 Case No.: 08-12832

Type of Business: The Debtor engages in investment schemes.

Chapter 15 Petition Date: December 12, 2008

Court: Southern District of New York (Manhattan)

Judge: Allan L. Gropper

Chapter 15 Petitioner's Counsel: Andrew T. Solomon, Esq.
                                 asolomon@sandw.com
                                 Sullivan & Worcester LLP
                                 1290 Avenue of the Americas
                                 29th Floor
                                 New York, NY 10104
                                 Tel: (212) 660 3000
                                 Fax: (212) 660 3001

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million


SYNCORA HOLDINGS: NYSE Suspends Common Stock Trading on Dec. 17
---------------------------------------------------------------
Syncora Holdings Ltd. was notified by the NYSE Regulation, Inc.,
that as a result of the company's common shares no longer meeting
the New York Stock Exchange continued listing standards, the NYSE
will suspend trading of Syncora's common stock effective on the
NYSE's opening on Dec. 17, 2008.  Syncora does not intend to
appeal the NYSE's decision at this time and, consequently, it is
expected that the common stock will be delisted following the
NYSE's application to the Securities and Exchange Commission.

In particular, Syncora has been advised that its shares are out of
compliance with two of the NYSE's continued listing standards:

   i) maintaining an average market capitalization of not less
      than $75 million over a consecutive 30 trading-day period
      and a stockholders' equity of not less than $75 million; and

  ii) maintaining an average closing price of not less than $1.00
      over a consecutive 30 trading-day period.

The company expects that its common stock will be quoted on the
Financial Industry Regulatory Authority's over-the-counter
bulletin board and on the Pink Sheets Inc.'s Pink Quote System.  A
new ticker symbol will be assigned on the day trading is suspended
from the NYSE.

The delisting from the NYSE does not represent any change in the
company's current strategic plan, in the negotiations with the
financial counterparties or in the involvement by the New York
State Insurance Department in the company's operations.

                    About Syncora Holdings Ltd.

Based in Hamilton, Bermuda, Syncora Holdings Ltd. (NYSE: SCA) --
http://www.syncora.com/-- fka Security Capital Assurance Ltd.
is a monoline financial guarantee insurance provider, and Syncora
Guarantee Re Ltd. (formerly XL Financial Assurance Ltd.), a
monoline provider of reinsurance to financial guarantee insurers
that provides credit enhancement for the obligations of debt
issuers worldwide.

                        Going Concern Doubt

In the opinion of the company, the principal factors which affect
the company's ability to continue as a going concern are: (i) its
ability to successfully reach agreements with Financial
Counterparties and other parties to commute, terminate or
restructure the company's CDS contracts and policies on terms
satisfactory to the company, well as to address the company's
public finance business to the satisfaction of the New York
Superintendent of Insurance, (ii) the risk of adverse loss
development on its remaining in-force business not so commuted,
terminated or restructured (particularly in regard to its exposure
to residential mortgages) that would cause it not to be in
compliance with its $65 million minimum policyholders' surplus
requirement under New York state law, and (iii) the risk of
intervention by the NYID as a result of the financial condition of
Syncora Guarantee.

As a result of uncertainties associated with these factors
affecting the company's ability to continue as a going concern,
management has concluded that there is substantial doubt about the
ability of the company to continue as a going concern.


TENSYR LTD: Moody's Downgrades Ratings on Two Note Classes to Ca
----------------------------------------------------------------
Moody's Investors Service has downgraded its ratings of two
classes of notes issued by Tensyr Ltd.:

US$255,000,000 Class S Floating Rate Notes due 2013

  -- Current Rating: Ca
  -- Prior Rating: Aaa
  -- Date of Last Rating Action: 02/15/2007

US$91,500,000 Class M Floating Rate Notes due 2013
  -- Current Rating: Ca
  -- Prior Rating: Aaa
  -- Date of Last Rating Action: 02/15/2007

This transaction is a Collateralized Fund Obligation that is
backed by shares in Fairfield Sentry Ltd., a hedge fund which
invested almost all of its assets in an account managed by Bernard
L. Madoff through his broker-dealer and investment adviser firm,
Bernard L. Madoff Investment Securities LLC.  According to
Moody's, the rating action was precipitated by the filing on
December 11, 2008 of a securities fraud complaint by the S.E.C.
against both Madoff and BMIS.

According to the S.E.C. complaint, Madoff falsely represented to
investors that returns were being earned on their accounts at BMIS
because of investments he was making, when in actuality Madoff was
paying earlier investors with funds raised from later investors.
The S.E.C. complaint also alleges that Madoff admitted to senior
employees of BMIS that the adviser business of BMIS losses amount
to $50 billion, far exceeding BMIS's assets.  According to the
complaint, the S.E.C. is seeking an Order from the United States
District Court in the Southern District of New York to temporarily
appoint a receiver for the assets of BMIS and to freeze the assets
of Madoff and BMIS.  The downgrade to Ca reflects Moody's
expectation that the likely asset freeze will seriously impair
Tensyr Ltd.'s ability to make payments on the rated notes.  The
downgrade also reflects Moody's expectation of potentially
substantial losses to investors in the notes.


TPG-AUSTIN: Fearful Lehman's Inaction Will Cue Own Ch. 11 Filing
-----------------------------------------------------------------
Unless the Bankruptcy Court overseeing Lehman Brothers's chapter
11 cases allows TPG-Austin Portfolio Holdings LLC to obtain
alternative financing or is otherwise able to reach a workable
agreement with Lehman, "within the next few weeks, TPG-Austin may
be forced to consider its own chapter 11 bankruptcy case due to
Lehman Commercial Paper, Inc.'s failure to fulfill its commitment"
to lend under the terms of a 2007 Revolving Loan facility.  This
disclosure appears in a pleading filed in Lehman Brothers' chapter
11 cases by Theodore B. Stolman, Esq., at Stutman, Treister &
Glatt, P.C.

Last month, TPG-Austin asked the U.S. Bankruptcy Court for the
Southern District of New York to compel Lehman Commercial
Paper Inc., to either assume or reject the credit agreement that
funds the continued operation of 10 Class A office buildings in
Austin, Texas.  The properties were acquired for about $1.2
billion from the affiliates of The Blackstone Real Estate Advisors
by TPG-Austin Portfolio Syndication Partners JV, a partnership
comprised of Thomas Properties Group, the California State
Teachers Retirement System and Lehman Brothers Holdings.  The
partnership owns a series of limited liability companies, which
own 100% of TPG-Austin Portfolio Holdings.

Based on TPG-Austin Portfolio Holdings' current flow projection,
the company will run out of cash by January next year, when an
approximate $19 million property tax bill comes due.

Lehman says that it hasn't had enough time to make a decision
about whether to assume or reject the loan agreement and TPG-
Austin hasn't presented evidence of any compelling circumstances
or significant prejudice that should result in being compelled to
make a quick decision.  Those statements appear in an objection
filed with the Bankruptcy Court by Michael P. Kessler, Esq., at
Weil, Gotshal & Manges LLP.

                         About TPG-Austin

TPG-Austin is an affiliate of Thomas Properties Group, Inc.
(NASDAQ: TPGI).  TPG-Austin owns a portfolio of ten properties
totaling 3.5 million square feet in Austin, Texas. TPGI,
indirectly through its joint venture with the California State
Teachers Retirement System (CalSTRS), holds a 6.25% interest in
TPG-Austin.  An affiliate of Lehman Brothers currently owns 50% of
the equity in the Austin portfolio.  Lehman Commercial Paper, Inc.
is the loan syndication agent on a $292.5 million Credit Agreement
under which TPG-Austin is the borrower.  Under the Credit
Agreement, a $192.5 million term loan was fully funded, and a $100
million revolving credit facility remains unfunded.  TPGI issued a
borrowing notice for the full $100 million revolving loan under
the Credit Agreement and subsequently issued a notice of default.
For more information on
Thomas Properties Group, Inc., visit http://www.tpgre.com/


TRIBUNE CO: Wants to Enjoin Utilities From Ceasing Services
-----------------------------------------------------------
Tribune Co. asks approval from the U.S. Bankruptcy Court for the
District of Delaware to enjoin utility providers from halting
services due to its bankruptcy filing.

In connection with the operation of the Debtors' businesses and
management of their properties, they incur utility expenses for
water, sewer service, electricity, gas, local and long-distance
telecom service, data service, fiber transmission, waste disposal,
and other similar services.  The Debtors spend about $5,510,000
for Utility Services on a monthly basis.

A list of the Debtors' Utility Providers can be accessed for free
at http://bankrupt.com/misc/Tribune_UtilityProviders.pdf

Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., in Wilmington, Delaware, proposed attorney for the
Debtors, tells the Court that a disruption of the utility
services at any of the Debtors' facilities would likely be costly
and harmful to the Debtors' business, as they would be forced
from the outset to focus on finding replacement Utility
Providers.

By this Motion, the Debtors ask the Court to prohibit the Utility
Providers from altering, refusing, or discontinuing service on
account of prepetition invoices, including the making of demands
for security deposits or accelerated payment terms.

Mr. Pernick says the Debtors intend to pay all postpetition
obligations to the Utility Providers in a timely manner,
consistent with the ordinary course of operating their
businesses.  To provide adequate assurance of payment for future
services to the Utility Providers, the Debtors propose to deposit
an initial sum of $2,755,000, which is 50% of their estimated
average monthly cost of Utility Services, into an interest-
bearing, newly-created, segregated account on December 28, 2008.

Mr. Pernick asserts that the Adequate Assurance Deposit
constitutes sufficient adequate assurance to the Utility
Providers.  However, to ensure that all Utility Providers receive
adequate notice of Adequate Assurance, the Debtors propose:

  (a) to serve a copy of the Utility Motion on each of the
      Utility Provider within three business days after the
      entry of the Interim Order by the Court;

  (b) that if a Utility Provider is not satisfied with the
      Adequate Assurance Deposit provided by the Debtors, it
      must serve a request for additional adequate assurance to
      the Debtors;

  (c) that any additional assurance request must (i) be in
      writing, (ii) set forth the location for which Utility
      Services are provided, (iii) include a summary of the
      Debtors' payment history relevant to the affected
      accounts, and (iv) set forth why the Utility Provider
      believes that the Proposed Adequate Assurance is not
      sufficient;

  (d) that without further Court order, the Debtors may enter
      into agreements granting additional adequate assurance to
      a Utility Provider serving an additional assurance
      request, if the Debtors determine that additional
      assurance is reasonable;

  (e) that if the Debtors determine that the additional
      assurance is not reasonable, the Debtors will request a
      hearing before the Court;

  (f) that pending a resolution of dispute at the Determination
      Hearing, the relevant Utility Provider will be restrained
      from altering, refusing, or discontinuing service to the
      Debtors; and

  (g) that the Adequate Assurance will be deemed adequate
      assurance of payment for any Utility Provider that fails
      to make an Additional Assurance Request.

                      About Tribune Company

Headquartered in Chicago, Illinois, Tribune Company --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball
team.  The company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No.
08-13141).  The Debtors proposed Sidley Austion LLP as their
counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware
counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as
financial advisors; and Epiq Bankruptcy Solutions LLC as claims
agent.  As of Dec. 8, 2008, the Debtors have $7,604,195,000 in
total assets and $12,972,541,148 in total debts.


VENOCO INC: S&P Keeps B Subordinate Debt Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services said that, following an
industry review of oil and gas exploration and production
companies, it revised the outlook to stable from positive on a
number of speculative-grade companies while affirming the ratings.
The review was prompted by S&P's recent revision of its oil and
gas pricing assumptions in light of the rapid decline in
hydrocarbon prices and S&P's expectation that lower prices will
prevail for the near to medium term.

S&P revised the outlook on Forest Oil Corp. (BB-) to stable from
positive because S&P expects worsening credit metrics.  At S&P's
2009 pricing assumptions, S&P expects debt to EBITDA to be roughly
3x, which well exceeds S&P's published upgrade trigger of 2x.  In
addition to the lower pricing assumptions, Forest's debt is higher
than S&P previously expected because the company has not been able
to consummate anticipated asset sales.  Liquidity should remain
adequate in 2009.  S&P expects Forest to lower its capital budget
from the 2008 level to be in line with internally generated cash
flows.

S&P revised the outlook on Whiting Petroleum Corp. (BB-) to stable
from positive.  Although the company has reported significant
production growth throughout 2008, primarily in the Bakken oil
formation in the northern U.S.), positive rating momentum has
stalled because of the lower price environment.  Furthermore,
Whiting is vulnerable to further price declines because of its
minimal hedge position in 2009.  S&P does highlight, though, that
the company's liquidity position of about $400 million as of
Sept. 30, 2008, and its significant covenant cushion are adequate
for the rating.

On Clayton Williams Energy Inc. (B) S&P revised the outlook to
stable from positive because of weaker credit measures, in light
of S&P's revised crude oil and natural gas price assumptions.
Although near-term liquidity remains adequate, the outlook
revision reflects S&P's expectation that Clayton Williams will not
be able to sustain its recent financial performance in the near
term. S&P also expect Clayton's operating cash flows to weaken,
given the company's "unhedged" position in 2009 and a relatively
high cost structure.

The revision of the outlook on Venoco Inc. (B) to stable from
positive stems from falling commodity prices.  This decline
reduces S&P's confidence that credit measures will improve
materially in the near term.  The company is selling or monetizing
(through a volumetric production payment) its interest in the
Hastings complex to Denbury Resources Inc. (BB/Stable/--), which
will likely result in debt repayment and increase availability
under the revolving credit facility.  However, the lower price
environment will probably reduce the proceeds.

                           Ratings List

                 Ratings Affirmed, Outlook Revised

                   Clayton Williams Energy Inc.

                                To              From
                                --              ----
    Corporate credit rating     B/Stable/--     B/Positive/--
     Sr unsecd                  B+              B+
     Recovery                   2               2

                           Forest Oil Corp.

                                To              From
                                --              ----
    Corporate credit rating     BB-/Stable/--   BB-/Positive/--
     Sr unsecd                  B+              B+
     Recovery                   5               5

                            Venoco Inc.

                                To              From
                                --              ----
    Corporate credit rating     B/Stable/--     B/Positive/--
     Sub debt                   B               B
     Recovery                   3               3

                       Whiting Petroleum Corp.

                                To              From
                                --              ----
    Corporate credit rating     BB-/Stable/--   BB-/Positive/--
     Sub debt                   BB-             BB-
     Recovery                   3               3


VESTA INSURANCE: Files Post-Confirmation Status Reports
-------------------------------------------------------
In separate post-confirmation status reports, dated November 25
and December 8, 2008, Lloyd T. Whitaker, Plan Trustee for Vesta
Insurance Group, Inc., disclosed that Vesta made no payments to
claims for the months ended October and November 2008.

Mr. Whitaker affirmed that all priority and pre-confirmation
administrative expense claims against Gaines have been paid in
full for both periods.  All post-confirmation taxes have been
paid by Vesta on a current basis, he added.

Ralph Brotherton, Plan Trustee for Florida Select Insurance
Agency, Inc.'s Plan of Liquidation, stated in a post-confirmation
status report filed with the Court on November 10, 2008, that the
Debtor has made an initial distribution of 20% of the allowed
unsecured claims for the month ended October 31, 2008.
Mr. Brotherton reported that the Debtor made no payments in
November 2008.  Mr. Brotherton affirmed that all administrative
expense payments have been paid in accordance with Florida
Select's Plan, except for amounts due to the Debtor's counsel and
the Plan Trustee and that the Plan of Liquidation has been
substantially consummated.

Kevin O'Halloran, Plan Trustee for J. Gordon Gaines, Inc.,
disclosed that Gaines made no payments to claims for the months
ended October and November 2008.  Mr. O'Halloran affirmed that all
priority and pre-confirmation administrative expense claims
against Gaines have been paid in full for both periods.  All post-
confirmation taxes have been paid by Gaines on a current basis, he
added.

                       About Vesta Insurance

Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc.
(Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding
company for a group of insurance companies that primarily offer
property insurance in targeted states.

Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership
III, L.P., filed an involuntary chapter 7 petition against the
company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517).
The case was converted to a voluntary chapter 11 case on Aug. 8,
2006 (Bankr. N.D. Ala. Case No. 06-02517).  Eric W. Anderson,
Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor.
R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker,
LLC, represents the petitioning creditors.  In its schedules of
assets and liabilities, Vesta listed $14,919,938 in total assets
and $214,278,847 in total liabilities.

J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that
manages the company's numerous insurance subsidiaries and employs
the headquarters workers.  The company filed for chapter 11
protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808).
Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP,
represent the Debtor in its restructuring efforts.   In its
schedules of assets and liabilities, Gaines listed $19,818,094 in
total assets and $16,046,237 in total liabilities.

On Aug. 1, 2006, the District Court of Travis County, Texas
entered an order appointing the Texas Commissioner of Insurance
as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries:
Vesta Fire Insurance Corporation; The Shelby Insurance Company;
Shelby Casualty Insurance Corporation; Texas Select Lloyds
Insurance Company; and Select Insurance Services, Inc.

Florida Select Insurance Agency Inc., an affiliate, filed for
chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No.
07-01849).  Rufus Dorsey, IV, Esq., at Parker Hudson Rainer &
Dobbs LLP, represents Florida Select.  The Court confirmed FSIA's
plan on March 24, 2008.

(Vesta Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


VESTA INSURANCE: Trustee Seeks to Close Gaines' Chapter 11 Case
---------------------------------------------------------------
Kevin O'Halloran, in his capacity as Plan Trustee for J. Gordon
Gaines, Inc., asks the U.S. Bankruptcy Court for the Northern
District of Alabama to close Gaines' Chapter 11 case.

In support of his request, Mr. O'Halloran contends that:

  * he has paid in full all allowed priority tax claims asserted
    against Gaines;

  * he has paid in full all allowed priority non-tax claims;

  * he has completed the process for reviewing all the proof of
    claims filed against Gaines for general unsecured claims,
    has objected to certain of the claims, and has resolved the
    objections either through settlements or by Court order;

  * he has paid all non-ordinary course administrative claims
    asserted against Gaines before the Confirmation Date;

  * he has paid all of the fees and expenses owing to
    Professional Persons for services rendered before the
    Effective Date;

  * he has continued to pay the ordinary course administrative
    claims asserted against Gaines in accordance with the terms
    and conditions of agreements with claimants or with
    applicable law and is current on the administrative claims
    and on all fees owing to the Bankruptcy Administrator; and

  * with respect to compensation due the Plan Trustee and any
    other post-confirmation professionals, he has continued to
    pay compensation in the ordinary course of business in
    accordance with the plan.  He notes that as of November 25,
    2008, he has paid these amounts:

         Plan Trustee                $88,524
         PHRD                        343,694
         Johnston Barton             210,749
         Balch and Bingham            77,470
         Stichter Riedel               7,030

The Plan Trustee notes that currently, an aggregate of $118,716
in additional unpaid fees and expenses owed by the Gaines' estate
to Mr. O'Halloran and to Johnston Barton.  He also notes that
after entry of a final decree closing the Chapter 11 case,
Gaines' estate will incur additional expenses for services
rendered and expenses incurred.  However, the Plan Trustee
believes that the fees and expenses will not adversely impact the
Plan Trustee's ability to pay in the ordinary course of managing
the Debtor's estate.

In addition, the Plan Trustee tells the Court that most of
Gaines' assets have been liquidated.  The only remaining Gaines
assets to be liquidated include, but not limited to:

  (a) Gaines' right to recover on its proof of claim filed in
      the bankruptcy case of Florida Select Insurance Agency;

  (b) Gaines' claim against ITAC Solutions, Inc., which is the
      subject of a lawsuit pending in the Circuit Court of
      Jefferson County, Alabama;

  (c) Gaines' interest as tenant in a property located at
      300 Riverhills Business Park, Suite 340, in Birmingham,
      Alabama;

  (d) Gaines' interest in certain items of computer equipment
      and related property interest located in Atlanta, Georgia;

  (e) any claim by Gaines against Hawaii Insurance & Guaranty
      Company;

  (f) any claim by Gaines against Florida Select Insurance
      Company; and

  (g) the contingent assets among Gaines, the Texas Receivership
      Entities, and Vesta Timber Co. LLC.

As previously reported, the Court authorized the Plan Trustee to
assign certain assets of Gaines to Vesta Fire Insurance
Corporation to satisfy Vesta Fire's obligation under the Texas
Receivership Settlement Agreement.

The Plan Trustee tells the Court that he has already assigned
certain D7O claims and claims against former professionals to
Vesta Fire pursuant to the Assignment Order.  Before the end of
the year, he says he hopes to make final distributions totaling
$1,072,091 based on allowed general unsecured claims, after which
all allowed claims will be paid in full.  Additionally, the Plan
Trustee intends to pay administrative expenses outstanding and
other post-confirmation administrative costs.

The Plan Trustee notes that once he has paid all of the allowed
Unsecured Claims and any additional administrative expenses, he
intends to dissolve Gaines in accordance with Delaware state law,
consistent with Section 7.1 of the Plan.

The Plan Trustee contends that Gaines' bankruptcy case has been
"fully administered" to the extent required for the case to be
closed under Section 350(a) of the Bankruptcy Code.

                       About Vesta Insurance

Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc.
(Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding
company for a group of insurance companies that primarily offer
property insurance in targeted states.

Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership
III, L.P., filed an involuntary chapter 7 petition against the
company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517).
The case was converted to a voluntary chapter 11 case on Aug. 8,
2006 (Bankr. N.D. Ala. Case No. 06-02517).  Eric W. Anderson,
Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor.
R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker,
LLC, represents the petitioning creditors.  In its schedules of
assets and liabilities, Vesta listed $14,919,938 in total assets
and $214,278,847 in total liabilities.

J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that
manages the company's numerous insurance subsidiaries and employs
the headquarters workers.  The company filed for chapter 11
protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808).
Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP,
represent the Debtor in its restructuring efforts.   In its
schedules of assets and liabilities, Gaines listed $19,818,094 in
total assets and $16,046,237 in total liabilities.

On Aug. 1, 2006, the District Court of Travis County, Texas
entered an order appointing the Texas Commissioner of Insurance
as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries:
Vesta Fire Insurance Corporation; The Shelby Insurance Company;
Shelby Casualty Insurance Corporation; Texas Select Lloyds
Insurance Company; and Select Insurance Services, Inc.

Florida Select Insurance Agency Inc., an affiliate, filed for
chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No.
07-01849).  Rufus Dorsey, IV, Esq., at Parker Hudson Rainer &
Dobbs LLP, represents Florida Select.  The Court confirmed FSIA's
plan on March 24, 2008.

(Vesta Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


VILLAGE HOMES: Has Authority to Use Cash & Sell Homes
-----------------------------------------------------
Bloomberg News reports that Homebuilder Village Homes of Colorado
Inc. has authority until March 9 to use cash and sell homes so
long as the lenders don't object.

The company disclosed $138 million in debt in its bankruptcy
petition.  According to Bloomberg's Bill Rochelle, the lender with
the largest secured claim is an affiliate of Guaranty Financial
Group Inc. owed $86 million.  GMAC LLC and its subsidiary
Residential Capital LLC are owed $36.1 million.

Headquartered in Greenwood Village, Colorado, Village Homes of
Colorado Inc. develops and builds residential communities.  The
Debtor filed for bankruptcy on November 6, 2008 (Bankr. D. Colo.
Case No. 08-27714).  The Hon. A. Bruce Campbell presides over the
case.  Garry R. Appel, Esq., at Appel Lucas, in Denver, Colorado,
acts as the Debtor's bankruptcy counsel.  When it filed for
bankruptcy, the Debtor reported $103,898,087 in total assets, and
$138,414,003 in total debts.


WELLMAN INC: Parties Object to Confirmation of Restructuring Plan
-----------------------------------------------------------------
Three parties have filed objections to Wellman Inc. and its
affiliates' Joint Plan of Reorganization, as amended.

A. Dow Chemical

The Dow Chemical Company tells the U.S. Bankruptcy Court for the
Southern District of New York that it engaged in negotiations with
the Debtors as to the resolution of its objections to the
confirmation of the Debtors' Third Amended Joint Plan of
Reorganization.  Given the ongoing negotiations, Dow Chemical
filed a limited objection to preserve its rights.

Scott P. Shectman, Esq., at Dilworth Paxson LLP, in Philadelphia,
Pennsylvania, relates that Dow Chemical is generally concerned
about the Debtors' ability to pay its claim pursuant to Section
503(b)(9) of the Bankruptcy Code.  In addition, Dow Chemical is
also concerned if the Debtors have the ability to meet their
burden of proof.

Dow Chemical says it has an ongoing sales relationship with the
Debtors and thus, objects to the granting and scope of proposed
releases contained in Article VIII of the Plan.  Dow Chemical
further objects to:

  -- the bringing of any causes of action which are not
     specifically disclosed and any provision of the Plan that
     can be construed to limit Dow Chemical's ability to assert
     a defense or counterclaim;

  -- the "waivability" provisions under the Plan without notice
     to potentially affected creditors;

  -- the Plan as it can be construed that Dow Chemical is
     waiving and giving up any right to assert its setoff on
     recoupment rights; and

  -- any provisions of the Plan that can be construed as
     prohibiting the payment of Dow Chemical's Section 503(b)(9)
     Claim on the effective date of the Plan.

B. MEGlobal Americas

MEGlobal Americas, Inc., tells the Court that it is currently
engaged in significant negotiations with the Debtors in
connection with resolving multiple issues, including, but not
limited to:

  -- the assumption of an existing supply agreement for the sale
     of a product known as EG or EGPG;

  -- the creation of a long-term supply agreement for another
     separate product;

  -- the reconciliation of prepetition monies due to MEGlobal
     and MEGlobal's setoff and recoupment rights as to credits
     due from MEGlobal to Wellman; and

  -- the priority, treatment and satisfaction of MEGlobal's
     claims.

Given the ongoing negotiations, MEGlobal seeks to preserve its
rights with respect to the Debtors' Third Amended Joint Plan of
Reorganization.

C. Eastman

Ross S. Barr, Esq., at Jones Day, in New York, relates that
before the objection deadline, Eastman Chemical Company contacted
the Debtors regarding certain of its concerns with respect to the
Debtors' Third Amended Joint Plan of Reorganization.  As a result
of the discussion, the Debtors agreed to make certain
modifications on any order confirming the Plan to resolve
Eastman's concerns.

Specifically, the Debtors agreed to the inclusion of this
language:

  "Nothing in the Plan or this Confirmation Order shall in any
  way limit or impact (a) any setoff, recoupment or similar
  rights that Eastman may have relating to the Litigation and
  any proof of Claim filed in these chapter 11 cases, (b) the
  full and final adjudication of the Litigation in the Delaware
  District Court, including Eastman's assertion, prosecution
  and/or litigation (including the conducting of discovery) of
  its counterclaims and defenses asserted in the Litigation, and
  the liquidation of all claims asserted by the parties in the
  Litigation, with any Claims of Eastman against the Debtors
  arising out of the Litigation receiving the same treatment
  accorded to similarly situated Claims under the Plan or (c)
  any claims or causes of action that Eastman may have against
  any Released Party, other than the Debtors, (i) relating to
  the Litigation or (ii) unrelated to the Debtors."

Eastman Chemical is a defendant and counterclaimant in a patent
infringement action currently pending in the United States
District Court for the District of Delaware.

Because the documents reflecting the Plan Changes likely will not
be complete until on or shortly before the date of the
Confirmation Hearing, Eastman Chemical reserves its rights with
respect to the confirmation of the Plan.  To the extent the
changes are not reflected in the relevant documents, Eastman
Chemical reserves its right to amend or supplement its limited
objection and to object to the Plan on any and all grounds.

                       Terms of Wellman's Plan

As reported by the Troubled Company Reporter in November, the
Bankruptcy Court has approved Wellman's Amended Disclosure
Statement and authorized the company to begin soliciting votes on
its plan of reorganization.

The Plan contemplates the:

   -- The debt of the first and second lien holders will be
      converted into equity of the reorganized company --
      "Reorganized Wellman".  The first lien holders will receive
      70%, and the second lien holders will receive 30% of the
      common stock of Reorganized Wellman on the Plan's effective
      date, subject to dilution by the conversion of the newly
      issued convertible notes.

   -- The company will receive $90 million in cash in exchange for
      $120 million of convertible notes issued through a rights
      offering, which will be offered to the first and second lien
      holders.  These notes can be converted into 60% of the
      common stock of Reorganized Wellman.  The $90 million will
      be used to repay amounts borrowed under its Debtor in
      Possession Credit Agreement and pay certain deferred
      financing fees, administrative expenses, priority claims,
      cure payments and professional fees.

   -- The first lien holders will receive the proceeds from the
      sale of the property, plant, and equipment associated with
      the company's Palmetto facility.

   -- The second lien holders will receive approximately 80% of
      the proceeds, if any, of a litigation trust and the general
      unsecured creditors will receive the remainder.

The company has obtained an amendment of its DIP Facility, which
provides that the company must achieve the following milestones in
order to remain in compliance with the DIP Facility:

   -- Receive an acceptable backstop commitment for the rights
      offering on or before Nov. 25, 2008;

   -- Obtain an order confirming the Plan by Dec. 16, 2008; and

   -- Emerge from bankruptcy prior to Dec. 31, 2008.

                        About Wellman Inc.

Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]:
WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and
markets packaging and engineering resins used in food and beverage
packaging, apparel, home furnishings and automobiles.  They
manufacture resins and polyester staple fiber a three major
production facilities.

The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595).
Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York
City, represents the Debtors.  Lazard Freres & Co., LLC, acts as
the Debtors' financial advisors and investment bankers.  Conway,
Del Genio, Gries & Co., LLC, was also retained as the Debtors'
chief restructuring advisor.

The United States Trustee for Region 2 has appointed seven members
to the Official Committee of Unsecured Creditors.  Mark R.
Somerstein, Esq., at Ropes & Gray LLP, serves as the Committee's
bankruptcy counsel.  FTI Consulting, Inc., acts as the panel's
financial advisors.

Wellman Inc., in its bankruptcy petition, listed total assets of
$124,277,177 and total liabilities of $600,084,885, as of Dec. 31,
2007, on a stand-alone basis.  Debtor-affiliate ALG, Inc., listed
assets between $500 million and $1 billion on a stand-alone basis
at the time of the bankruptcy filing.  Debtor-affiliates Fiber
Industries Inc., Prince Inc., and Wellman of Mississippi Inc.,
listed assets between $100 million and $500 million at the time of
their bankruptcy filings.

On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $512,400,000 in total assets and $730,500,000 in
liabilities as of June 30, 2008.

Wellman filed a restructuring plan before the Bankruptcy Court on
June 25, 2008.  (Wellman Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).


WHITING PETROLEUM: S&P Keeps BB- Sub. Debt Rating; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that, following an
industry review of oil and gas exploration and production
companies, it revised the outlook to stable from positive on a
number of speculative-grade companies while affirming the ratings.
The review was prompted by S&P's recent revision of its oil and
gas pricing assumptions in light of the rapid decline in
hydrocarbon prices and S&P's expectation that lower prices will
prevail for the near to medium term.

S&P revised the outlook on Forest Oil Corp. (BB-) to stable from
positive because S&P expects worsening credit metrics.  At S&P's
2009 pricing assumptions, S&P expects debt to EBITDA to be roughly
3x, which well exceeds S&P's published upgrade trigger of 2x.  In
addition to the lower pricing assumptions, Forest's debt is higher
than S&P previously expected because the company has not been able
to consummate anticipated asset sales.  Liquidity should remain
adequate in 2009.  S&P expects Forest to lower its capital budget
from the 2008 level to be in line with internally generated cash
flows.

S&P revised the outlook on Whiting Petroleum Corp. (BB-) to stable
from positive.  Although the company has reported significant
production growth throughout 2008, primarily in the Bakken oil
formation in the northern U.S.), positive rating momentum has
stalled because of the lower price environment.  Furthermore,
Whiting is vulnerable to further price declines because of its
minimal hedge position in 2009.  S&P does highlight, though, that
the company's liquidity position of about $400 million as of
Sept. 30, 2008, and its significant covenant cushion are adequate
for the rating.

On Clayton Williams Energy Inc. (B) S&P revised the outlook to
stable from positive because of weaker credit measures, in light
of S&P's revised crude oil and natural gas price assumptions.
Although near-term liquidity remains adequate, the outlook
revision reflects S&P's expectation that Clayton Williams will not
be able to sustain its recent financial performance in the near
term. S&P also expect Clayton's operating cash flows to weaken,
given the company's "unhedged" position in 2009 and a relatively
high cost structure.

The revision of the outlook on Venoco Inc. (B) to stable from
positive stems from falling commodity prices.  This decline
reduces S&P's confidence that credit measures will improve
materially in the near term.  The company is selling or monetizing
(through a volumetric production payment) its interest in the
Hastings complex to Denbury Resources Inc. (BB/Stable/--), which
will likely result in debt repayment and increase availability
under the revolving credit facility.  However, the lower price
environment will probably reduce the proceeds.

                           Ratings List

                 Ratings Affirmed, Outlook Revised

                   Clayton Williams Energy Inc.

                                To              From
                                --              ----
    Corporate credit rating     B/Stable/--     B/Positive/--
     Sr unsecd                  B+              B+
     Recovery                   2               2

                           Forest Oil Corp.

                                To              From
                                --              ----
    Corporate credit rating     BB-/Stable/--   BB-/Positive/--
     Sr unsecd                  B+              B+
     Recovery                   5               5

                            Venoco Inc.

                                To              From
                                --              ----
    Corporate credit rating     B/Stable/--     B/Positive/--
     Sub debt                   B               B
     Recovery                   3               3

                       Whiting Petroleum Corp.

                                To              From
                                --              ----
    Corporate credit rating     BB-/Stable/--   BB-/Positive/--
     Sub debt                   BB-             BB-
     Recovery                   3               3


YM BIOSCIENCES: Auditor Raises Going Concern Doubt
--------------------------------------------------
KPMG LLP, Chartered Accountants, in Toronto, Canada, had expressed
substantial doubt about the company's ability to continue as a
going concern after it audited the company's financial statements
for the three-year period ended June 30, 2008.  "The company has
no net earnings, minimal revenue and negative operating cash flows
that raise substantial doubt about its ability to continue as a
going concern," KPMG said in a letter to the Board dated
September 15, 2008.

In its Annual Report for the year ended June 30, 2008, the company
disclosed that since inception, it has concentrated on licensing,
acquisition and product development.  "It has had no net earnings,
minimal revenue and negative operating cash flows, and has
financed its activities through the issuance of equity. The
company's ability to continue as a going concern is dependent on
obtaining additional investment capital and the achievement of
profitable operations.  There can be no assurance that the company
will be successful in increasing revenue or raising additional
investment capital to generate sufficient cash flows to continue
as a going concern."

As of June 30, 2008, the company's balance sheet showed total
assets of $63,073,239, total liabilities of $6,645,952, total
deferred revenue of $4,414,256, and total shareholders' equity of
$52,013,031.  For the years ended June 30, 2006, 2007, and 2008,
the company posted net losses of $86,566,501, $118,296,741 and
$133,182,485.

A full-text copy of the company's Annual Report is available for
free at:

http://www.sec.gov/Archives/edgar/data/1178347/000114420408053912/v126907_20f.htm

YM Biosciences Inc. is developing certain therapeutic products for
patients with cancer and an inhalation delivered fentanyl product
to treat acute and breakthrough pain, including cancer pain.  It
was incorporated on August 17, 1994 under the laws of the Province
of Ontario and was continued under the laws of the Province of
Nova Scotia on December 11, 2001.  It has entered into licensing
agreements with certain biotechnology, pharmaceutical and medical
institutes or has acquired technology originated in those
institutes.  During fiscal 2006, the company acquired Eximias
Pharmaceutical Corporation of Berwyn, Pennsylvania, a privately
held pharmaceutical company engaged in the acquisition,
development and commercialization of products for the treatment of
cancer and cancer-related disorders.  During fiscal 2005, the
Company acquired Delex Therapeutics Inc.


ZOO HF: Fitch Retains Junk Ratings on EUR12.5 Mil. Class D Notes
----------------------------------------------------------------
Fitch Ratings has revised the Rating Watch on three classes of Zoo
HF 3 Plc. to Negative from Evolving.

  -- EUR94,500,000 class A remains at 'A' and Rating Watch revised
     to Negative from Evolving;

  -- EUR8,000,000 class B remains at 'BBB' and Rating Watch
     revised to Negative from Evolving;

  -- EUR6,500,000 class C remains at 'BB' and Rating Watch revised
     to Negative from Evolving;

  -- EUR12,500,000 class D remains at 'CCC';

  -- EUR5,500,000 class E remains at 'CCC'.

An anticipated restructuring is no longer expected to occur.  As
such, the transaction will go into a full redemption.  The
preliminary results for the end of November are still within
Fitch's expectations of a 10% initial loss applied in its cash
flow analysis.  In addition, Fitch also reviewed the transaction
under a stressed redemption scenario which applies a peak two
month rolling loss based off of the Credit Suisse Tremont Hedge
Fund Index along with additional scaled stresses to the portfolio.

Class A, B and C notes are placed on Rating Watch Negative given
the current market environment that has negatively affected the
hedge fund sector.  Fitch may take additional action if Zoo
experiences losses that exceed Fitch's expectations.


* Fitch Says U.S. CMBS Loan Extensions Won't Trigger Rating Cuts
----------------------------------------------------------------
Most fixed-rate U.S. CMBS loans that mature within the next six
months are likely to be extended, although this event would not
necessarily trigger rating downgrades, according to Fitch Ratings.

Approximately 1,100 fixed-rate loans totaling $5.7 billion in
Fitch's portfolio, need to refinance before June 30, 2009.  This
exposure is in 111 deals with an unpaid balance of $77 billion out
of the universe of 433 deals, totaling $510 billion.  Fitch
expects the majority of losses would be absorbed by the 'CCC' and
below classes, any negative rating actions will likely be to below
investment grade classes.

Last quarter, Fitch observed an increase in performing matured
loans, a trend which Fitch expects to continue.  Loans are likely
to transfer to special servicing before maturity due to the
continued lack of available capital to refinance.  Most of these
loans would have refinanced a year or even six months ago given
their high coupons, amortization and generally high debt service
coverage ratios.

Through the third quarter of this year, most borrowers were able
to refinance maturing loans, although some required short term
extensions (generally 60 days) from master servicers in order to
allow more time to close new loan commitments.  While some
refinancing came from larger banks and insurance companies, to a
greater extent it was provided by smaller regional banks.  Because
liquidity is now non-existent, master servicers are transferring
more loans with upcoming maturities to special servicing.  Special
servicers have the flexibility to work out, modify or extend loans
up to a year at a time, whereas a master servicer can only offer a
short term extension.

Fitch expects special servicers will extend many loans until
liquidity returns to the market, rather than foreclosing on
properties in a stalled market.  'While it is difficult to say
when liquidity will return to the market, lending will come back
slowly and to the lower leveraged, strongest performing properties
first,' said Susan Merrick, Managing Director and head of Fitch's
U.S. CMBS group.  While many of the loans with modified maturity
dates will eventually secure financing, loans in troubled markets
or those susceptible to declining consumer spending such as retail
and hotel properties, may see their cash flows decline and have a
harder time securing financing even when liquidity does return.

Fitch will closely monitor the performance of these modified
loans.  While modified loans are subject to special servicing
fees, Fitch expects servicers to pass these costs on to borrowers
as a condition of their extensions.  Those fees reimbursed would
contribute to interest shortfalls to the deals.


* Moody's Sees Bankruptcy Risk Among Derivative Product Companies
-----------------------------------------------------------------
Moody's is reviewing several issues regarding the operations of
derivative product companies, including the risk of voluntary
bankruptcy and, for a subset of DPCs, the role of continuation
managers.  DPCs are special purpose operating companies typically
established and sponsored by investment banks to transact in
derivative products such as interest rate swaps.  Their Aaa
ratings are based on factors such as bankruptcy remoteness from
their sponsor, dynamic capital and collateral requirements,
insulation from market risk via mirror trades with a sponsor-
affiliated entity and adherence to a set of operating guidelines
that, among other things, restricts the types of products the DPC
may transact in.

In light of the October 5, 2008, bankruptcy filings by Lehman
Brothers Derivative Products Inc. and Lehman Brothers Financial
Products Inc., two DPCs sponsored by Lehman Brothers, Moody's
highlights the risk that well-capitalized DPCs which otherwise
merit their Aaa counterparty rating may file for voluntary
bankruptcy.  As a result of LBDP's and LBFP's bankruptcy filings
and persisting uncertainty over the timing of their payments to
their counterparties, Moody's downgraded the counterparty ratings
of LBDP and LBFP from Aaa to Baa3 with direction uncertain on
October 6, 2008, and further to B1 on review for downgrade on
October 10, 2008.  LBDP's Aaa counterparty rating was initially
placed on review for downgrade on September 16, 2008 due to
operational risk in administering LBDP's termination as a
derivative products company.  The bankruptcy filing of Lehman
Brothers Holdings Inc. had caused a trigger event for LBDP, which
as a termination vehicle required LBDP to unwind its portfolio.

Moody's is engaged in active dialogue with DPCs to assess their
susceptibility to voluntary bankruptcy and possible mitigants to
that risk.  For DPCs whose operating guidelines specify the
activation of a contingent manager under certain circumstances,
Moody's is also discussing the role of such a contingent manager.
With respect to the risk of voluntary bankruptcy, issues of
concern to Moody's include mechanisms to preserve the independence
of the board of directors, procedural requirements for filing
voluntary bankruptcy, safeguards against the improper removal and
replacement of independent directors, and transparency and timely
communication of bankruptcy-related board actions to interested
parties, including counterparties.  Moody's is also interested in
whether counterparties have an adequate opportunity to contest an
invalidly filed application for voluntary bankruptcy.

In Moody's view, voluntary bankruptcy poses a significant risk
that, at the very least, counterparties will not receive payments
due to them on a timely basis.  In some circumstances, the ability
of a DPC to ultimately meet its obligations in full may be
compromised by a bankruptcy filing.  Although DPCs have existing
features that protect their bankruptcy remoteness, the bankruptcy
filings of the Lehman DPCs have called into question the
sufficiency of those measures.  As a result, Moody's will be
reviewing the actions undertaken by each DPC to address the risk
of voluntary bankruptcy and analyzing their adequacy.  Moody's
will be issuing a publication on both the potential mitigants to
the risk of voluntary bankruptcy and findings with respect to
continuation managers, followed by an invitation for comments from
market participants.


* S&P Puts Junk Ratings on 8 Tranches From Seven CDO Deals
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 15
tranches from seven U.S. cash flow and hybrid collateralized debt
obligation transactions.  S&P removed seven of the lowered ratings
from CreditWatch with negative implications.  The ratings on six
of the downgraded tranches are on CreditWatch with negative
implications, indicating a significant likelihood of further
downgrades.  The CreditWatch placements primarily affect
transactions for which a significant portion of the collateral
assets currently have ratings on CreditWatch with negative
implications or have significant exposure to assets rated in the
'CCC' category.

The 15 downgraded U.S. cash flow and hybrid tranches have a total
issuance amount of $2.129 billion.  Four of the seven affected
transactions are mezzanine structured finance CDOs of asset-backed
securities, which are collateralized in large part by mezzanine
tranches of residential mortgage-backed securities and other SF
securities.  Two of the seven are high-grade SF CDOs of ABS that
were collateralized at origination primarily by 'AAA' through 'A'
rated tranches of RMBS and other SF securities.

The other transaction is a CDO of CDOs that was collateralized at
origination primarily by notes from other CDOs, as well as by
tranches from RMBS and other SF transactions.  The CDO downgrades
reflect a number of factors, including credit deterioration and
recent negative rating actions on U.S. subprime RMBS.

In addition, S&P reviewed the ratings assigned to Klio III Funding
Ltd. and left the ratings on this transaction at their current
levels based on the current credit support available to support
the tranches.

To date, including the CDO tranches listed below and including
actions on both publicly and confidentially rated tranches, S&P
has lowered its ratings on 4,084 tranches from 914 U.S. cash flow,
hybrid, and synthetic CDO transactions as a result of stress in
the U.S. residential mortgage market and credit deterioration of
U.S. RMBS.  In addition, 962 ratings from 431 transactions are
currently on CreditWatch with negative implications for the same
reasons.  In all, S&P has downgraded $486.274 billion of CDO
issuance.  Additionally, S&P's ratings on $9.251 billion of
securities have not been lowered but are currently on CreditWatch
with negative implications, indicating a high likelihood of future
downgrades.

S&P will continue to monitor the CDO transactions it rates and
take rating actions, including CreditWatch placements, when
appropriate.

                          Rating Actions

                                               Rating
                                               ------
  Transaction            Class To              From
  -----------            ----- --              ----
Camber 5 Ltd             1     CC              BBB-/Watch Neg

Camber 5 Ltd             A-2   CC              BB-/Watch Neg

Cascade Funding
  CDO I                  A-1   AA/Watch Neg    AAA/Watch Neg

Cascade Funding
  CDO I                  A-2   CC              CCC-

C-BASS CBO XIII
  Ltd                    B     AA-             AA

C-BASS CBO XIII
  Ltd                    C     A-/Watch Neg    A/Watch Neg

C-BASS CBO XIII
  Ltd                    D     BB/Watch Neg    BBB/Watch Neg

Crystal Cove
  CDO, Ltd.              A1    B-/Watch Neg    BBB+/Watch Neg

Crystal Cove
  CDO, Ltd.              A2    CC              B-/Watch Neg

Halcyon Securitized
  Products               A-1   CC              BBB-/Watch Neg
  Investors ABS CDO
  I Ltd.

Halcyon Securitized
  Products               A-2   CC              B-/Watch Neg
  Investors ABS CDO
  I Ltd.

Halcyon Securitized
  Products               B     CC               CCC/Watch Neg
  Investors ABS CDO
  I Ltd.

McKinley Funding
  Ltd                    ABCP  BB/B/Watch Neg   A+/A-1+/Watch Neg

McKinley Funding
  Ltd                    A-1   B-/Watch Neg     BBB-/Watch Neg

Point Pleasant
  Funding 2007-1 S              CCC-            BB+/Watch Neg A-

                     Other Ratings Reviewed

   Transaction                     Class       Rating
   -----------                     -----       ------
   Camber 5 Ltd                    A-3         CC
   Camber 5 Ltd                    B           CC
   Camber 5 Ltd                    C           CC
   C-BASS CBO XIII Ltd             A           AAA
   Crystal Cove CDO, Ltd.          B           CC
   Crystal Cove CDO, Ltd.          C1          CC
   Crystal Cove CDO, Ltd.          C2          CC
   Halcyon Securitized Products    C           CC
     Investors ABS CDO I Ltd.
   Halcyon Securitized Products    D           CC
     Investors ABS CDO I Ltd.
   Halcyon Securitized Products    E           CC
     Investors ABS CDO I Ltd.
   Klio III Funding Ltd            ABCP        BBB/A-2/Watch Neg
   Klio III Funding Ltd            A-1         B+/Watch Neg
   Klio III Funding Ltd            A-2         CCC-/Watch Neg
   Klio III Funding Ltd            B           CC
   Klio III Funding Ltd            C           CC
   Klio III Funding Ltd            Pref Shrs   CC
   McKinley Funding Ltd            A-2         CC
   McKinley Funding Ltd            A-3         CC
   McKinley Funding Ltd            B           CC
   McKinley Funding Ltd            C           CC
   Point Pleasant Funding 2007-1   UnfdSrExpo  CCsrp
   Point Pleasant Funding 2007-1   A-1         CC
   Point Pleasant Funding 2007-1   A-2         CC
   Point Pleasant Funding 2007-1   B           CC
   Point Pleasant Funding 2007-1   C           CC
   Point Pleasant Funding 2007-1   D           CC


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
                                               Total
                                              Share-
                                    Total    Holders    Working
                                   Assets     Equity    Capital
Company             Ticker          ($MM)      ($MM)      ($MM)
-------             ------         ------    -------    -------
ABSOLUTE SOFTWRE    ABT CN           107         (3)        31
APP PHARMACEUTIC    APPX US        1,105        (42)       260
ARBITRON INC        ARB US           162         (9)       (39)
BARE ESCENTUALS     BARE US          272        (25)       125
BLOUNT INTL         BLT US           485        (20)       119
CABLEVISION SYS     CVC US         9,717     (4,966)    (1,583)
CENTENNIAL COMM     CYCL US        1,394     (1,026)        86
CHENIERE ENERGY     LNG US         3,049       (266)       423
CHENIERE ENERGY     CQP US         2,021       (312)       179
CHOICE HOTELS       CHH US           350        (91)        (8)
CLOROX CO           CLX US         4,587       (364)      (396)
CV THERAPEUTICS     CVTX US          392       (226)       286
DELTEK INC          PROJ US          188        (62)        34
DISH NETWORK-A      DISH US        7,177     (2,129)    (1,318)
DOMINO'S PIZZA      DPZ US           441     (1,437)        84
DUN & BRADSTREET    DNB US         1,642       (554)      (206)
DYAX CORP           DYAX US           91        (28)        33
ENERGY SAV INCOM    SIF-U CN         464       (263)       (92)
EXELIXIS INC        EXEL US          255        (23)        (1)
EXTENDICARE REAL    EXE-U CN       1,621        (31)       125
FERRELLGAS-LP       FGP US         1,510        (12)      (114)
GARTNER INC         IT US          1,115        (15)      (253)
GENERAL MOTORS      GM US        110,425    (58,994)   (18,461)
GENERAL MOTORS C    GMB BB       110,425    (58,994)   (18,461)
HEALTHSOUTH CORP    HLS US         1,980       (874)      (218)
IMAX CORP           IMX CN           238        (91)        41
INCYTE CORP         INCY US          265       (177)       216
INTERMUNE INC       ITMN US          206        (92)       134
KNOLOGY INC         KNOL US          647        (44)        13
LINEAR TECH CORP    LLTC US        1,665       (378)     1,109
MOODY'S CORP        MCO US         1,694       (894)      (331)
NATIONAL CINEMED    NCMI US          569       (476)        86
NAVISTAR INTL       NAV US        11,557       (228)     1,501
NPS PHARM INC       NPSP US          202       (208)        90
OCH-ZIFF CAPIT-A    OZM US         2,224       (173)         -
OSIRIS THERAPEUT    OSIR US           29         (8)       (14)
OVERSTOCK.COM       OSTK US          145         (4)        33
REGAL ENTERTAI-A    RGC US         2,557       (224)      (112)
REVLON INC-A        REV US           877       (999)         8
ROTHMANS INC        ROC CN           545       (213)       102
SALLY BEAUTY HOL    SBH US         1,527       (697)       367
SONIC CORP          SONC US          836        (64)       (13)
STEREOTAXIS INC     STXS US           55         (5)         3
SUCCESSFACTORS I    SFSF US          168         (3)         4
SUN COMMUNITIES     SUI US         1,222        (28)         -
SYNTA PHARMACEUT    SNTA US           91        (35)        58
TAUBMAN CENTERS     TCO US         3,182        (20)         -
TEAL EXPLORATION    TEL SJ            56        (22)       (62)
THERAVANCE          THRX US          255       (125)       184
UAL CORP            UAUA US       20,731     (1,282)    (1,583)
UST INC             UST US         1,402       (326)       237
WEIGHT WATCHERS     WTW US         1,110       (901)      (270)
WESTERN UNION       WU US          5,504        (90)       319
WR GRACE & CO       GRA US         3,754       (179)       970



                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa,
Luke Caballos, Sheryl Joy P. Olano, Carlo Fernandez, Christopher
G. Patalinghug, and Peter A. Chapman, Editors.

Copyright 2008.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                    *** End of Transmission ***